Swiss economic momentum accelerated in the second quarter, exceeding that of the euro area and hitting its fastest pace since 2014.
Gross domestic product rose 0.6 percent in the three months through June, after gaining a revised 0.3 percent in the prior quarter, the State Secretariat for Economic Affairs in Bern said on Tuesday. That jump, helped by government consumption and foreign trade, beats the 0.4 percent increase forecast by economists in a Bloomberg survey.
A year after suffering an exchange-rate shock, the export-oriented Swiss economy appears to be finding its footing again. Demand in countries such as Germany is recovering and local companies are finding ways to cut costs and improve productivity. Unemployment is low by European standards and the strong franc, which the central bank says is overvalued, is buttressing domestic consumption by lowering the cost of imports.
“We have strength in certain sectors like pharmaceuticals”•this has also showed up in our export data recently”•but still struggling in areas like machinery,” Oliver Adler, head of economic research at Credit Suisse, told Bloomberg Television’s Anna Edwards. “But overall the big shock of 2015 is sort of waning and that is showing up in these GDP numbers.”
According to the SECO, contributions to growth came from foreign trade and government consumption, while household spending stagnated and investment in construction and equipment declined. Concerning exports of goods, the chemicals and pharmaceuticals category “provided the strongest contribution to growth,” the SECO said.