Swiss Economy Expanded 0.9% in Q2

Switzerland’s economy expanded at a faster pace than economists forecast in the second quarter as companies stepped up spending to meet global demand.

Gross domestic product rose 0.9 percent from the first quarter, when it increased 1 percent, the State Secretariat for Economic Affairs in Bern said.

In the year, Swiss GDP increased 3.4 percent after rising 2.3 percent in the first quarter, today’s report showed. Imports surged 4.6 percent from the previous three months, when they increased 2.1 percent. Consumer spending was unchanged after rising 0.7 percent in the first quarter and construction spending increased 1.3 percent.

Gross fixed capital spending jumped 2.1 percent from the first quarter, when it dropped 2.2 percent. Exports growth slowed to 1.7 percent from 3.7 percent.

Switzerland’s recovery may lose some momentum as a global slowdown threatens to hurt exports just as a stronger franc makes goods less competitive abroad.

With exports accounting for more than half of Swiss GDP, the Swiss National Bank was forced to add billions of euros to its balance sheet in the 15 months through June to weaken the franc. The Zurich-based central bank on June 17 raised its economic forecast for this year to 2 percent from around 1.5 percent and said it won’t counter currency gains anymore.

The Swiss currency has since appreciated 6.9 percent against the euro, reaching a record 1.2852 on Aug. 31. The franc also strengthened versus the dollar over the past two months partly on signs a U.S. recovery is losing steam.

Swiss Economy Expanded 0.9% in Q2, Bloomberg
9/5/2010 6:50:37 PM