Economy of Switzerland is expected to have grown in the 1st quarter as domestic demand and currency cap of the Central Bank has kept the recession at bay, unlike many of the neighbors. According to a forecast published by the renowned analysts, the 1st quarter Gross Domestic Product of Switzerland is expected to increase 0.2% from its value in the previous 3 months. This is a contrasting figure if compared to that of the surrounding Euro region which is suffering from six quarters of continuous recession. The largest economy in the region, Germany has been able to manage an expansion of only 0.1% in the first 3 months of 2013.
The Swiss National Bank has been successful in shielding the country’s economy from the effects of the slump experienced in the Euro region. The current currency ceiling has been set to 1.20 Swiss Francs per Euro. This policy has helped to ensure the fact that the Swiss economy suffers from a single quarter contraction only, since the cap was imposed in September, 2011.
According to the Senior Economist of UBS AG, Reto Huenerwadel, the last quarter results were better than what was anticipated by the economists. Now, the question is whether Switzerland has been able to outperform the rest of Europe at a comparable pace or not. As mentioned by Huenerwadel, the price consumption in Switzerland is growing above the trend, however, it’s still to be seen whether this situation will last in light of a labor market that is softening. Incidentally, domestic demand accounted for around 57% of growth in 2012, whereas net exports made up around 10%.
On 30th May, the GDP figures will be published officially, a day after the forecasts from the Organization for Economic Cooperation and Development are published. The trade data of Switzerland for April and the KOF barometer will be released right on this week as well. Incidentally, KOF barometer tries to predict the state of economy in a timeframe lasting 6 months.
On 23rd May, while affirming the AAA credit rating of Switzerland, officials of Moody’s Investors Service mentioned that the economic strength of Switzerland is pretty high. This gets reflected into the open, highly developed and diversified economy of Switzerland. Switzerland has the top rating in Fitch Rating and the Standard & Poor’s as well.