ZURICH, March 1 The Swiss economy grew by
a stronger-than-expected 1.3 percent year-on-year in the final
quarter of 2011, shrugging off the impact of a strong franc and
easing pressure on the central bank to take more steps to tame
the currency's rise.
Compared to the previous quarter, gross domestic product
expanded 0.1 percent, the State Secretariat for Economics said
on Thursday, reducing the likelihood that the economy will drift
into recession at the start of 2012.
Analysts in a Reuters poll had expected a contraction of 0.2
percent on the quarter and growth of 0.9 percent on the year
"The economy may not as bad off as many pessimists had
predicted," said Swissquote analyst Peter Rosenstreich. "Despite
the strong franc there is solid demand for Swiss products and in
aggregate growth is bumping along."
Investors seeking a safe haven from the euro zone's debt
troubles drove gains for the franc against the euro nearly 20
percent in the first eight months of last year, prompting the
Swiss National Bank to cap it at 1.20 per euro on Sept. 6,
citing the risk of deflation and recession.
But with previous years' gains leaving the franc still
nearly a third stronger than when Lehman Brothers collapsed in
2008, SNB interim Chairman Thomas Jordan has warned repeatedly
that the bank stands ready to take further steps to restrain the
currency if necessary.
Trade unions have called on the SNB to shift the cap towards
1.40 per euro. But economists said the fourth-quarter growth
data would not provide them with further ammunition.
"We don't expect the cap to be shifted," said Credit Suisse
economist Maxime Botteron. "Deflationary risks hardly exist any
more. We expect positive inflation prints on the month ahead. So
the central bank won't introduce fresh measures."
Moreover, the economic trough may be bottoming out: the KOF
economic barometer, which forecasts the economy's performance in
six months' time, posted its first rise in nearly a year last
EXPORTS DEFY FRANC
The franc's strength has blighted results for companies
ranging from bank UBS to cement-maker Holcim
. Firms in the export and the tourism sectors are
particularly feeling the pinch.
The SNB forecasts growth of 0.5 percent for 2012, down from
growth of 1.9 percent in 2011.
The euro zone accounts for more than half of Switzerland's
exports, so the bloc's debt crisis has also sapped demand for
Nevertheless, exports of goods grew 2.8 percent in the
fourth quarter from a year earlier. Trade in chemicals and
related products -- such as drugs by Novartis and
Roche -- contributed strongly to that rise, the
economics secretariat said.
Exports of precision instruments, watches and jewellery,
which are particular popular in places like China and Hong Kong,
showed positive developments, the secretariat said.
Despite the strong franc, which makes imports cheaper,
imports of goods were 0.4 percent softer.
Adding to the positive momentum for the economy, the data
for the third quarter was revised up. In the months between July
and September, the economy expanded 0.3 percent on the quarter
and 1.6 percent on the year.