Source: Swiss customs office (click on image to view larger)

Bern, Switzerland (GenevaLunch) – Several economic indicators published by the Swiss federal government Tuesday 21 September show an economy still in the doldrums, but with the outlook slightly more optimistic than in August 2009. Exports are down and imports are down by an even larger percentage, the economy is stabilizing but will remain “sluggish” in 2010 and unemployment is high. The good news: while the picture is still gloomy, it’s getting a little brighter.

GDP growth positive, if only slightly, in 2010

The government’s economic advisory “Expert Group” released its latest quarterly projections, which include a “weaker decline” of GDP (gross domestic product), from -2.7 percent expected in June to -1.7 percent forecast now. The group now expects positive GDP growth in 2010 of 0.4 percent rather than the -0.4 percent projected earlier. Private consumption and building investment are holding relatively steady, which is helping Switzerland to have a recession less dramatic than in many countries, although 2009 will go down as the worst year since 1975 for GDP decline.

The group expects to see unemployment continue to climb from an average of 3.8 percent in 2009 to 5.2 percent in 2010, a reflection of the global economy slowing after its current initial recovery.

The question of how well world economies will manage to sustain their recovery in the second half of 2009 hangs over projections.

“For the second half of 2009, a rather strong economic force able to offset part of the previous massive losses in GDP (or growth slowdowns in Asia) is showing for the USA, Europe and Asia, further driven by national economic stimulus packages and the end of destocking activities in many countries, such that an increasing domestic demand could fuel domestic production. It remains to be seen, however, whether next year the economy will be able to continue its dynamic positive growth when the stimulating impulses from financial policies start to diminish.”

Switzerland remains vulnerable to global economy swings

The group notes in particular, for the global economy: for private consumption in the US to recover “private households will have to increase their savings rate more than they already have,” companies will need to increase capacity use and banks still face major problems such as yet more debt write-offs.

Swiss trade balance surplus grows as imports shrink

Swiss exports, CHF13 million in August, were down markedly, 14 percent compared to August 2008. Imports fell even more strongly, 18 percent, to CHF11.2 million, creating a trade surplus of CHF1.79 billion, up 25 percent over the same month in 2008. As in previous months in 2009, the hardest hit export industries were metal-working, machine, electronics and watchmaking. Only chemicals and food and beverages showed growth. Exports to the Middle East fell sharply, while they increased by 20 percent to Singapore and China.

A 38 percent drop in the price of energy products accounted for much of the fall in the value of imports, with some significant changes: imports from Libya fell 97 percent, while those from Azerbaidjan rose by 75 percent.

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