Switzerland: Economic barometer climbs to year-high
October 30, 2013
The KOF economic barometer - a leading indicator for future GDP growth - jumped to 1.72 points in October, up from a revised 1.54 points in September (previously reported: 1.53 points). The reading represents the seventh consecutive improvement in the index and the highest level since September 2012. The increase overshot market expectations of a rise to 1.60 points. The KOF Institute pointed out that, "in the next few months the year-on-year growth rate of Swiss gross domestic product (GDP) should gain further momentum."
October's improvement reflects an increase in the core GDP sub-component of the barometer (which excludes construction and banking). Meanwhile, the construction and banking sub-gauges pointed in contrasting directions. According to the KOF, positive developments in construction should persist, while banking activity continues to moderate.
FocusEconomics Consensus Forecast panelists expect GDP to expand 1.7% in 2013, which is up 0.3 percentage points from last month's projection. For 2014, the panel expects economic growth to accelerate slightly to 1.8%.
Author: Ricardo Aceves, Senior Economist