Swiss economy unexpectedly stagnated in the third quarter due to weak private and public consumption. The gross domestic product (GDP) recorded zero growth in July-September following an expansion of 0.6% in the second quarter, shows the official figures of Secretariat on economic issues. The economists expecting GDP to expand by 0.3%. The economic slowdown in Switzerland coincided with the weakening in Germany, where exports shrank slightly, while investment in equipment fell. The Eurozone is the top destination for exports of Swiss products.
Last year, the economy of the small alpine country has been subject of shock after the central bank loosened the exchange rate of the CHF, which rose sharply against the EUR. The strong currency continues to cause problems for many companies. Although the recovery in the Eurozone continued political uncertainty associated with a series of elections next year could hurt demand.
Positive contribution to the Swiss economy comes from household consumption, which increased by only 0.1%, while investment in equipment recorded a growth of 0.5%. The government spending decreased by 0.1% and the trade also weighs on GDP growth.
The Swiss economy was largest hurt by the low domestic consumption. The manufacturing was relatively solid, and other sectors such as the tourism industry that have been under pressure due to the strong franc didn’t fare so poorly either. Recent economic indexes have indicated that economic growth is on track. A closely watched index of manufacturing activity touched its highest in nearly three years in November.
On an annual basis Swiss economy grows by 1.3% in the third quarter.
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