Zurich, Switzerland (GenevaLunch) – The outlook for the Swiss economy is gloomier than initially believed, says economiesuisse in its latest forecast, published Monday 14 June, which predicts a fall of 2.9 percent in GDP (gross domestic product) for 2009 and another drop of 0.8 percent in 2010. It expects prices to remain stable but internal consumption to be weak, with unemployment growing to 4 percent in 2009 and 5.3 percent in 2010.

The umbrella organization for Swiss business interests had said at the end of 2008 that it expected zero growth in 2009. The change in forecast was fueled by a more than 13 percent decline in exports and a 14.4 percent fall in imports. Many companies are turning to partial unemployment to reduce costs, but if demand abroad remains low they will need to cut jobs in order to sharply curb expenditure, the report concludes.

TSR notes that its conclusions are in line with those been drawn last week by two other key observers of the Swiss economy, BAK Basel Economics and the Consensus Forecast of the KOF Institute, both of which lowered their growth forecasts to -2.5 percent for 2009.

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