Swiss economy to stagnate in coming months – institute

28 December 2011 16:25  [Source: ICIS news]

LONDON (ICIS)--Switzerland’s economy is set to stagnate in coming months and slip into a slight recession, a research institute said on Wednesday.

The KOF economics research institute at the ETH Zurich technical university said its monthly economic indicator for the Swiss economy slid again in December, to 0.01 points, from 0.34 in November.

“This suggests that Swiss economic growth on a year-on-year perspective is going to stagnate over the first months of 2012,” the institute said.

The KOF indicator has been falling since May 2011.

The technical indicator aims to estimate how the Swiss economy will perform in the next three to six months. It is comprised of 25 “multi-sectoral bundled individual indicators.” The indicator’s key measurements include Swiss industry performance, Swiss consumption rates, and Swiss exports to the EU.

Earlier this month, KOF said the Swiss economy would develop “at a snail's pace” in 2012, with year-on-year GDP growth of only 0.2%, as the eurozone debt crisis and its consequences stifled demand worldwide.

During the winter quarters – the 2011 fourth and 2012 first quarter - Switzerland would even slip into a slight recession, “technically speaking,” with two consecutive negative quarterly GDP growth rates, it said.

The institute predicted 13,000 jobs losses by the end of the second quarter of 2012.

It also warned of continuing effects from the strong Swiss franc on Switzerland’s export-based industries such as chemicals and pharmaceuticals.

In a related development, Switzerland-based independent refiner Petroplus said this week its lenders froze about $1bn (€770m) in uncommitted credit lines that are “critical” to the firms’ continued operations.

($1 = €0.77)

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By: Stefan Baumgarten
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