Switzerland: Economic activity slows marginally in Q2
September 3, 2013
In the second quarter, GDP expanded a seasonally-adjusted 0.5% over the previous quarter. The expansion was slightly below the 0.6% rise observed in the first quarter, but overshot market expectations of a 0.3% expansion in the economy. Compared to the same period last year, GDP expanded 2.5% in Q2, which was stronger than the 1.2% increase recorded in Q1.
The marginal slowdown in the second quarter reflected the fact that the improvement in domestic demand was offset by a deterioration in the external sector's net contribution to overall growth. Private consumption maintained a healthy pace, increasing 0.7% in Q2 (Q1: +0.6% quarter-on-quarter). Conversely, government consumption decelerated, stepping down from a 0.3% increase in Q1 to a 0.1% rise in Q2. Meanwhile, gross fixed investment swung from a 0.2% contraction in Q1 to a 1.4% expansion in Q2.
On the external front, exports of goods and services grew 0.9% over the previous period, which contrasts the 0.5% decline observed in the first quarter. In the same vein, imports swung from a 1.6% decline in Q1 to a 1.0% expansion in Q2. With import growth outpacing that of exports, the net contribution from the external sector to overall economic growth fell from 0.5 percentage points in Q1 to zero percentage points in Q2.
The State Secretariat for Economic Affairs (SECO) expects the economy to expand 1.4% in 2013, before accelerating to 2.1% in 2014. Meanwhile, the Swiss National Bank sees economic growth averaging between 1.0% and 1.5% in 2013. FocusEconomics Consensus Forecast panelists expect GDP to expand 1.2% in 2013, which is up 0.1 percentage points from last month's projection. For 2014, the panel expects economic growth to accelerate slightly to 1.6%.
Author: Ricardo Aceves, Senior Economist