Swiss Economy Stagnates In Q2

(RTTNews) - The Swiss economic output was stable in the second quarter as the improvement in household consumption was offset by the fall in investment, official data showed on Monday.

Gross domestic product stayed flat from the first quarter, when the economy expanded by 0.3 percent, the State Secretariat for Economic Affairs, or SECO, said. Economists had expected a 0.1 percent rise for the June quarter.

GDP, adjusted for sports events, also logged a flat change after posting 0.9 percent growth in the March quarter.

The industry saw a decline in value added, while the service sector again grew at an above-average rate, data showed. The construction sector suffered a setback, hit by shrinking revenues in all segments.

On the expenditure side, private consumption grew 0.4 percent compared to the prior quarter, driven by healthcare and food and accommodation services. Government consumption showed an increase of 0.1 percent.

On the other hand, equipment and software investment dropped by 3.7 percent, and construction investment slid by 0.8 percent.

Exports of goods dropped 1.2 percent, while shipments of services rose 2.6 percent. Imports of goods fell markedly by 7.2 percent, while those of services gained 1.5 percent.

On a yearly basis, economic growth slowed to 0.5 percent from 1.5 percent. The rate came in line with expectations.

Capital Economics' Adrian Prettejohn said activity will be sluggish for the rest of the year as manufacturers reported another sharp fall in output and monetary tightening should weigh on investment and consumption.

This will encourage the Swiss National Bank to cut rates early next when inflation is likely to be lower than the central bank expects, the economist added.