KOF said Wednesday that its economic barometer dropped to 2.10 in December from a revised 2.13 in the previous month. As per the previous estimate, the indicator was at 2.12 in November. The reading matched economists' forecast.
Swiss KOF Economic Barometer Slips Again In December
KOF said Wednesday that its economic barometer dropped to 2.10 in December from a revised 2.13 in the previous month. As per the previous estimate, the indicator was at 2.12 in November. The reading matched economists' forecast.
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Swiss KOF Economic Barometer Slips Again In December
(RTTNews) - Switzerland's KOF Institute's economic barometer dropped in December, indicating a slight slowdown in the pace of growth of the economy in the coming months.
KOF said Wednesday that its economic barometer dropped to 2.10 in December from a revised 2.13 in the previous month. As per the previous estimate, the indicator was at 2.12 in November. The reading matched economists' forecast.
The institute noted that despite the decline, the barometer stood at a high level. Switzerland's year-on-year gross domestic product growth is expected to remain positive in the coming months, albeit with slightly lower growth rates, the institute said.
The KOF economic barometer is based on a multi-sectoral design with three modules, namely, the core GDP module, the construction module and the banking module.
The core GDP module, which excludes construction and banking sectors, continued to indicate high growth rates and does not point to further slowdown at present, the report said. The core GDP module accounts for more than 90% of Swiss GDP and hence dominates the barometer.
Though the construction module remains in positive territory, it is slipping back. The banking module is moving sideways in positive territory, KOF noted.
The government and the central bank also forecast a notable moderation in Switzerland's economic expansion as the contribution from exports fades out under the influence of a strong currency and waning demand from European countries due to tough austerity measures there.
The Swiss National Bank expects GDP to rise by around 1.5% in 2011, following growth of about 2.5% this year. According to the central bank, the slowdown can mainly be attributed to generally subdued economic activity in industrialized nations and the appreciation of the Swiss franc
Earlier this month, the Swiss government raised its economic growth forecast for the next year as it expects the marked revival in domestic consumption and construction investment to soften a sharp slowdown in exports. The government now sees 1.5% growth for the economy next year after a stronger 2.7% expansion this year.
A strong rebound in consumer spending is expected to lead growth in the coming year, while cushioning the impact of slowing exports. On Tuesday, the UBS bank said it forecasts robust consumption growth of 1.7% next year, supported by strong immigration, low interest rates and declining unemployment, though its consumption indicator declined slightly in November.
Earlier this month, KOF upped its growth forecast for the economy next year as it expected robust support from household consumption. The institute now sees a gross domestic product growth of 1.9% next year and 2.7% this year.
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