Swiss Economy Growing Faster Than Expected

Better Than Expected

On Tuesday the State Secretariat for Economic Affairs published good information: the Swiss economy is in better condition than forecasted, as it grew by a faster than expected few months ago. Very good domestic demand data plus rising volumes in export were mainly to thanked for that. The Swiss economy grew by 0.9% compared with the same quarter last year, while expectations were at 0.6% year-on-year growth. Economic output adjusted for sporting events grew by 0.5% in the first quarter of the year, comparing to the last quarter of 2022.  of 2023 compared with the last quarter of 2022. This marked better performance than previewed by Reuters in a poll – economist predicted 0.1% growth. It also means that performance was better than flat growth noted at the end of 2022. Swiss economy is doing better than in the neighboring Germany. Last week Germany posted data showing it had entered a recession in the beginning of the year, with gross domestic product down by 0.3% in Q1. Higher inflation in Germany resulted in lower household consumption. In Switzerland inflation is also higher than normally, sometimes above 2% target, but relatively low comparing to other countries. Also, good exchange rate of Swiss franc helps curbing the inflation. Investors end to buy Swiss francs in difficult times.

Higher Spending

Consumer spending went up by 0.6% in the first quarter of this year. Consumer of services was at good level, consumer spending on goods was a bit more at moderate rate, with value added in retail declining by 0.4%. Exports also went up, by as much as 4%. After a long period of decline, manufacturing showed a sign of recovery, with 0.3% growth quarter on quarter. The finance sector has been struggling due to Credit Suisse collapse. "Buoyed by the continued recovery in travel, value added in the transport and communication sector (+0.7%) and in the accommodation and food services sector (+1.0%) increased at an above-average rate," SECO said in a statement.