Domestic Demand in Switzerland
Switzerland - Domestic Demand
Growth slows in the second quarter
The economy grew 0.3% on a seasonally-adjusted quarter-on-quarter basis in the second quarter, slowing from the downwardly revised 0.4% expansion in the first quarter (previously reported: +0.6% quarter-on-quarter). However, the result marginally surpassed market expectations of 0.2% growth. In annual terms, GDP expanded a paltry 0.3% in Q2, down from the revised 1.0% expansion in Q1 (previously reported: +1.7% year-on-year).
Q2’s deceleration was broad-based, driven by both slowing domestic demand and a weakening external sector. Fixed investment contracted 0.7% in quarterly terms (Q1: +1.6% qoq) on a dip in construction, and equipment and software investment amid heightened global economic uncertainty. Meanwhile, government consumption slowed (Q2: +0.1% qoq; Q1: +0.5% qoq), while inventories exerted a weaker drag on headline growth. Private consumption, on the other hand was stable, increasing 0.3% in the quarter, supported by muted inflationary pressures and a strong labor market.
The external sector also had a drab performance in the second quarter. Exports of goods and services grew 1.8% over the previous quarter in Q2, recovering from the 0.8% decline logged in Q1. The rebound was thanks to strong pharmaceutical and chemical shipments. Conversely, exports of services fell in the quarter. For its part, imports of goods and services rebounded sharply, expanding 5.0% in Q2 (Q1: -2.4% qoq) and ate into the external sector’s contribution to growth.
Q2’s weaker outturn paired with notable downward revisions to Q1’s formerly robust expansion portrays a much weaker Swiss economy in the first half of the year. Economic growth is projected to slow further in H2, weighed on by mounting headwinds due to global trade tensions stunting investment and exports, the latter of which will continue to be dampened by the high value of the Swiss franc.
The State Secretariat for Economic Affairs expects the economy to expand 1.2% in 2019 and 1.7% in 2020. FocusEconomics Consensus Forecast panelists expect GDP to expand 1.3% in 2019, which is unchanged from last month’s forecast, and project growth of 1.4% in 2020.
Switzerland - Domestic Demand Data
|Domestic Demand (annual variation in %)||-0.8||2.6||2.2||0.5||1.6|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||-1.04||6.27 %||Sep 04|
|Exchange Rate||0.98||-0.54 %||Sep 04|
|Stock Market||9,895||-0.82 %||Sep 04|
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October 2, 2019
Consumer prices fell by 0.1% in September, having stayed flat in August.
Switzerland: Manufacturing PMI in September falls to lowest level since July 2009; services PMI ticks up
October 1, 2019
The manufacturing Purchasing Managers’ Index (PMI) produced by Credit Suisse and procure.ch fell to 44.6 in September from 47.2 in August, marking the lowest level since July 2009.
October 1, 2019
Calendar-adjusted real retail sales fell 1.4% on an annual basis in August, almost reversing July’s revised 1.5% increase (previously: +1.4% year-on-year).
September 30, 2019
The KOF economic barometer—a leading composite indicator for the Swiss economy, which forecasts a six-month period—dropped to 93.2 in August, its lowest level since 2015, and below July’s revised figure of 95.5 (previously reported: 97.0 points).
September 19, 2019
At its meeting on 19 September, the Swiss National Bank (SNB) maintained its current expansionary policy stance as widely expected by market analysts.