Surprise KOF jump shows Swiss economy gathers speed

Wed Mar 30, 2011 6:00am EDT

* KOF indicator up at 2.24 vs forecast of fall to 2.15

* KOF says manufacturing, exports main driver behind rise

ZURICH, March 30 (Reuters) - Switzerland's economy is set to pick up speed despite the record-high franc, an unexpected jump in the country's leading growth barometer showed, as global demand for Swiss products and consumer spending remain strong.

The KOF indicator rose to 2.24 in March from an upwardly revised 2.19 in February, the KOF Swiss Economic Institute said on Wednesday. Analysts had expected the barometer to fall to 2.15 from the originally reported 2.18.ECONCH

All sub-components of the indicator were in positive territory, the KOF said, adding that the components measuring the Swiss manufacturing industry and exports were the main driver behind the recent rise.

The Swiss National Bank has revised up its growth forecast to around 2 percent for this year at its quarterly policy meeting on March 17, when it left interest rates at ultra-low levels to avoid any further boost to the strong currency.

But many economists are even more optimistic and the KOF institute sees growth accelerating to 2.8 percent in 2011 from 2.6 percent last year.

(Reporting by Sven Egenter; Editing by Toby Chopra)

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