Switzerland: Economy expands in final quarter of 2012
February 28, 2013
In the fourth quarter, GDP increased a seasonally adjusted 0.2% over the previous period, which came in below the strong 0.6% expansion tallied in the third quarter. Nevertheless, the print overshot market expectations, which had the economy recording flat growth. Compared to the same period the previous year, GDP accelerated from a 1.2% expansion in Q3 to a 1.4% increase in Q4, the fastest pace recorded since Q3 2011. In the full year 2012, the economy expanded 1.0%, slower than the 1.9% expansion tallied in 2011.
The better-than-expected figure was driven by healthy growth in domestic demand and by an improvement in the external sector. Private consumption grew 1.1% in Q4, faster than the 0.3% increase recorded in Q3. Government spending, in contrast, slowed from 1.4% in Q3 to 1.1% in Q4. While fixed investment swung from a 0.7% drop in the third quarter to a 0.5% expansion in the final quarter of 2012, total investment plunged 4.6% in Q4, amid a sharp destocking of inventories. Quarterly growth figures are strongly affected by chronically volatile inventories, as Switzerland has become the world's most important commodity trading hub.
On the external front, exports of goods and services accelerated from a 0.9% increase in the third quarter to a 1.6% expansion in the fourth. In contrast, imports grew 1.0% in Q4, slower than the 1.3% expansion registered in Q3. Consequently, the external sector's net contribution to overall growth improved from minus 0.1 percentage points in Q3 to plus 0.4 percentage points in Q4.
The State Secretariat for Economic Affairs (SECO) expects the economy to expand 1.3% in 2013, before accelerating to 2.0% in 2014. Meanwhile, the Swiss National Bank sees economic growth averaging between 1.0% and 1.5% in 2013. FocusEconomics Consensus Forecast panellists expect GDP to expand 1.1% 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 1.5%.
Author: Ricardo Aceves, Senior Economist