The Swiss government on Tuesday raised this year's growth forecast for the economy, but warned that the outlook is subjected to serious downside risks mainly due to deteriorating environment in Europe.
The State Secretariat for Economic Affairs (SECO) said that the the Federal Government's Expert Group now predicts 1.4 percent growth for the economy this year, faster than 0.8 percent projected in March.
"Thanks to robust domestic economic activity and a relatively resistant export industry, the Swiss economy is performing better than had been anticipated in view of the strong Swiss franc and an economic recession in many EU countries," the report said.
Meanwhile, the growth outlook for 2013 was lowered to 1.5 percent from previously estimated 1.8 percent.
"Various sectors and many export companies the situation remains tight, with strong downwards pressure on margins," SECO said. "Preventing an escalation of the sovereign debt crisis in the Euro region is the key prerequisite for a continuation of the positive economic development," it added.
The outlook on consumer spending was raised to 1.4 percent and that on government consumption was revised up to 2.1 percent. These are expected weaken somewhat to 1.3 percent and 0.7 percent respectively in 2013.
The government expects exports to grow 1.4 percent this year and 4 percent in 2013. Imports, meanwhile, will likely rose 2.5 percent in 2012 and 3 percent next year.
Unemployment rate is expected to rise slightly to 3.4 percent next year from 3.2 percent in 2012. Consumer prices are seen falling 0.4 percent in 2012, which will then rise 0.5 percent in 2012.
by RTT Staff Writer
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