Switzerland has been struggling to improve its growth picture in recent years, amid overall slow growth in the Euro-zone. Even though Swiss numbers have improved from the moribund state described in “Swiss miss” (Currency Trader, May 2005), they are not exactly on the fast track.
“They export 80-85 percent of their goods to Europe and their growth outlook has been soft,” explains Bob Lynch, head of G-10 FX strategy for the Americas at HSBC.
Melanie Averall, associate economist at Economy.com, is forecasting 2005 gross domestic product (GDP) growth to come in around 1.4 percent, slightly weaker than the Swiss government’s official 1.5 percent forecast, but better than the central bank’s 1-percent outlook. All the forecasts are below 2004’s GDP growth figure of 1.7 percent.
Looking at the latest industrial production figures, a solid gain of 4.0 percent year-over-year was seen in the second quarter, vs. a 0.2 percent decline in the first quarter. Second quarter industrial orders surged 6.6 percent year over year vs. a 1.5-percent decline in the first quarter.
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