Switzerland: Pace of economic growth quickens in Q1 on improving external sector
May 27, 2014
In the first quarter, GDP increased 0.5% over the previous quarter in seasonally-adjusted terms. The reading came in above the 0.2% expansion observed in the fourth quarter, but fell short of the 0.6% increase the market had expected. Compared to the same quarter last year, GDP accelerated from a 1.7% increase in Q4 to a 2.0% expansion in Q1.
Q1’s acceleration was driven by a notable improvement in the external sector. Exports of goods and services surged 2.2% in Q1, which was above the 1.0% increase tallied in Q4. Imports swung from a 3.1% expansion in Q4 to a 1.6% contraction in Q1. Consequently, the external sector’s net contribution to overall economic growth swung from a 0.8 percentage-point detraction in Q4 to a 2.0 percentage-point contribution in Q1.
On the domestic front, growth in private consumption softened, rising a mild 0.1% in Q1 (Q4: +0.7% quarter-on-quarter). Government spending swung from a 0.3% increase in Q4 to a 0.8% contraction in Q1. In addition, fixed investment grew 0.5%, which was only a fraction of the 1.8% increase observed in Q4.
Author: Ricardo Aceves, Senior Economist