Switzerland: Economic barometer reaches 30-month high in January
January 29, 2014
The KOF economic barometer - a leading indicator for future GDP growth - inched up from 1.95 points in December to 1.98 points in January, which marked the 10th consecutive month of improvement. The reading represents the highest level since July 2011, but fell just short of the 2.0 points the market had expected. In its accompanying statement, the KOF Institute pointed out that, "the positive trend at the start of the year was mostly carried by domestic consumption."
January's timid improvement reflects the continued improvement, albeit at a slower pace, in the core GDP sub-indicator (GDP excluding constructional and banking). In addition, the construction sub-gauge stabilized in January, "after months of following a downward trend." The KOF Institute concluded that the financial sub-indicator is pointing downward again.
The State Secretariat for Economic Affairs (SECO) expects the economy to expand 2.3% in 2014. Meanwhile, the Swiss National Bank expects economic growth to reach nearly 2.0% in 2014. FocusEconomics Consensus Forecast panelists expect GDP to expand 2.1% in 2014, which is unchanged from last month's projection. For 2015, the panel expects economic growth to accelerate slightly to 2.2%.
Author: Ricardo Aceves, Senior Economist