0925 GMT February 18, 2020
The Swiss economy grew by 0.6 percent in the first quarter, faster than the 0.4 percent forecast and double the 0.3 percent rate at the end of 2018.
The government currently expects growth of 1.1 percent for 2019, below the long term average of 1.7 percent and the 2.6 percent rate in 2018.
“Our current view for below-average growth in Switzerland this year remains our base-case scenario,” said government economist Ronald Indergand.
“Even after the strong first quarter I don’t expect we will have to substantially change this picture,” he said.
“The general environment has stayed the same and in some cases has deteriorated.”
The recovery during the first quarter was boosted by strong domestic demand in Switzerland, as well as one-off factors like a mild February which supported construction, and an improvement in the automotive sector.
But concerns remained, with forward-looking indicators like the Purchasing Managers Index turning negative as well as worries about the escalating trade war between the US and China impacting Europe and Germany’s economic slowdown hitting Switzerland.
Britain’s chaotic exit from the European Union also remained a risk. The Swiss government is due to give its next forecast on June 13.
“We believe currently Swiss industry is following the international trend with a certain time lag,” said Indergand.
“There have been shocks abroad which are taking some time to feed through. We don’t think this current rate of growth will be maintained for the year as a whole given the cooling down of the world economy and the high uncertainty looming.”