Dynamic economic growth in Switzerland was interrupted in the third quarter. Gross domestic product (GDP) decreased by 0.2 percent in the period from July to September, after having increased by 0.7 percent in the previous quarter.
Between July and September, real gross domestic product (GDP) dropped by 0.2 percent compared to a quarter, according to SECO on Thursday. However, compared to the same quarter last year it still corresponds to 2.4 percent growth.
The Swiss economy grew very dynamic in the second quarter, with (slightly altered) values of +0.7 percent in the previous quarter and 3.5 percent in the same quarter last year. The strong growth phase of the Swiss economy, which lasts for a year and a half, has suddenly been interrupted, commented Seco. At the same time, Switzerland followed a significant economic slowdown in other European countries, particularly in Germany.
Experts were wrongly evaluated
Experts interviewed by AWP expects a significantly higher growth in the previous quarter and estimated the increase between 0.2 and 0.6 percent. But even Seco is surprised. "This slowdown is clear because of export data in the third quarter, but we did not expect the intensity of the slowdown," said Roland Indergand, business manager at SEC, the AWP press agency.
Above all, it was surprising that domestic demand fell. The fact that after the cooling in Europe (especially Germany) and Asia there was no incentive from abroad, it was clear. But it would also be that the consumption and investments were so poorly surprised.
Consumers less willing to spend
Private consumption in the third quarter was barely + 0.1%. Here's the readiness for larger purchases on the background of weak real wages was low, Seco says. Consumption of the country's consumption (-0.1%) was slightly reduced.
As for investments, those in construction (+ 0.02%) stagnate more or less. Investment in equipment (-2.0%) was significantly reduced in almost all categories: fewer machines were invested in machines than a quarter earlier, according to Seco. In line with the decline in domestic demand, import and export of goods and services decreased significantly (-1.6%).
Listopad numbers give courage
On the manufacturing side, value added in the manufacturing sector fell slightly (-0.6%). However, in the context of the very dynamic growth of recent quarters, this is called high level normalization, Seco writes. In the energy sector, the added value dropped after two very positive previous quarters (-2.2%). The dry summer has led to production losses in hydro power plants.
In line with the decline in production in these sectors, exports of goods and energy fell sharply. Total commodity exports (-4.2%) decreased considerably. After all, the figures on foreign trade in October (+ 6.3% in real terms compared to the previous month) already suggest a strong recovery. The number of GDP is due to the extreme caution, Seco said.
Germany should also recover
"The so-called technical recession – two quarters in a row with negative growth rates – would be very surprising," he said. For example, in Germany, and thus the most important Swiss trading partner, we expect recovery in the current quarter. The fall in the third quarter is partially due to special factors in the automotive industry. (SDA)