March 3, 2020 / 7:19 AM / 5 months ago

UPDATE 2-Switzerland expects coronavirus to hit economy

* Swiss government expects to cut growth forecast for 2020

* Some sectors, such as tourism, already affected

* Main impact will be via disrupted supply chains, weaker demand (Recasts with economist comment)

By John Revill

ZURICH, March 3 (Reuters) - Swiss economic growth slowed to 0.3% in the fourth quarter of 2019, the government said on Tuesday, and it expects the coronavirus to weigh on output this year.

The outbreak had reversed earlier positive signals for the global economy and made forecasters gloomier about the prospects for 2020 as demand falls and supply chains are disrupted.

Government economist Ronald Indergand declined to quantify the impact on Switzerland, although he said the outlook for the country's economy had become more pessimistic.

"We saw an improvement in indicators like PMI data at the start of the year, but then with coronavirus the outlook darkened," he told Reuters.

"Our baseline for the world economy will have to be revised downward. This will also translate into our forecast for Switzerland, with the risks clearly to the downside."

The State Secretariat for Economic Affairs (SECO) had previously forecast the Swiss economy would grow 1.7% in 2020, with a new update expected on March 17.

The economy grew 0.9% during 2019, the slowest since 2009 and below the country's long-term average growth rate of 1.7%.

Quarter-on-quarter growth of 0.3% in the final three months was a slowdown from the third quarter's 0.4%.

Manufacturing was flat, with the previously strong chemicals and pharmaceutical industry unable to compensate for difficulties in machinery and metals.

Exports fell by 0.5%, reflecting difficulties in neighbouring Germany, Switzerland's biggest export market.

Swiss computer peripherals maker Logitech International downgraded its 20202 profit outlook, citing supply problems.

Indergand said the coronavirus situation was so uncertain it was impossible to say when the main impact would be felt in Switzerland.

The export-dependent country borders Italy, the centre of Europe's worst outbreak of the disease, and has had 30 confirmed cases of the disease so far.

It has joined countries banning big events to try to curb the epidemic, forcing cancellation of the Geneva car show, one of the industry's most important gatherings.

"We see some single companies and sectors affected in Q1, mainly via the foreign demand channel, for example no tourists from China," Indergand said.

"It is just too early to say if Q1 or Q2 will be more affected. It depends on the spread of the virus." (Reporting by John Revill; editing by Michael Shields, Larry King)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below