Reuters/Zurich
Switzerland’s economy slowed less than expected at the end of 2014 but the mood among Swiss companies has soured since the central bank abandoned its cap on the franc currency in January, data showed yesterday.
Gross domestic product expanded by 0.6% in the final quarter compared with the previous three months, more than the 0.3% forecast. Third-quarter growth was revised upwards, to 0.7%.
“The government spending and significant rise in exports explain the major part of the growth stability in the fourth quarter,” Swissquote analyst Ipek Ozkardeskaya said in a note.
The data for the three months to December covers the period shortly before the Swiss National Bank’s (SNB) shock decision on January 15 to drop its 1.20 per euro cap on the national currency.
The cap’s removal sent the Swiss franc soaring on foreign exchange markets, creating problems for exporters — the engine of the Swiss economy — and raising expectations the central bank will lower growth forecasts at its March 19 meeting.
A survey of nearly 3,000 businesses published yesterday by Swiss economic think tank KOF, which is predicting a 2015 recession in Switzerland, showed companies in all sectors were more worried about their economic prospects than a month ago.
The fall in confidence during February was especially noticeable among those active in the construction, architectural and engineering markets, KOF said.
Earlier yesterday, Swiss construction materials group AFG announced it would cut 150-200 jobs as it tries to manage higher costs on the back of the Swiss franc appreciation.
Companies struggling with the currency’s surge have reacted by shedding jobs, freezing salaries and moving business units out of Switzerland.
