Economic growth records best result since Q2 2022 in Q1

GDP growth improved somewhat to 0.5% on a seasonally adjusted quarter-on-quarter basis in the first quarter, from 0.3% in the fourth quarter of last year. Q1's reading marked the best result since Q2 2022. That said, the reading was flattered by sporting events, which distort Swiss GDP readings due to the country being host to several major sporting organizations; adjusted for sporting events, GDP rose 0.3% in Q1, matching the corresponding figure for the EU.

The upturn in quarter-on-quarter growth reflected improvements in private consumption, public spending, fixed investment and exports. Household spending increased 0.4% in the first quarter, which was above the fourth quarter's 0.3% expansion. Public spending hit an over two-year high of 0.2% in the first quarter (Q4 2023: +0.1% s.a. qoq). Meanwhile, fixed investment bounced back, growing 0.5% in Q1, contrasting the 0.8% decrease in the previous quarter. On the external front, exports of goods and services growth accelerated somewhat to 3.2% seasonally adjusted quarter on quarter in the first quarter (Q4 2023: +2.9% s.a. qoq). In addition, imports of goods and services growth sped up to 5.9% in Q1 (Q4 2023: +3.5% s.a. qoq).

Looking ahead, our Consensus is for GDP growth to continue at a similarly solid pace for the rest of the year, underpinned by low inflation and unemployment, rate cuts from the Central Bank, and recoveries in key trading partners.

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