KOF Upgrades Swiss Growth Forecast
Switzerland's economic growth will likely accelerate at a faster rate than estimated earlier, supported by stable domestic demand and an improvement in exports as the Eurozone recovery strengthens, revised estimates released by the KOF Economic Institute showed Monday.
The agency forecasts that gross domestic product will grow at a faster rate of 1.9 percent this year than 1 percent in 2012. The revised outlook marks an improvement from the 1.4 percent gain the the firm had predicted earlier.
Further, growth is expected to accelerate to 2.1 percent next year, slightly faster than the 2 percent estimated earlier. Going ahead, growth is seen gathering further momentum, and the economy will expand 2.3 percent in 2015.
According to KOF, an upturn in Switzerland's exports will contribute significantly to the economy in the coming months, shifting the dynamics of growth from domestic demand towards foreign demand. The firms expects Swiss exports to rise 4.2 on average in 2014.
Consumer prices will likely drop further by 0.2 percent this year, but will reverse the falling trend by recording increases of 0.5 percent and 0.7 percent, respectively, in 2014 and 2015.
At the same time, unemployment will remain low in the coming months, but will hardly fall any further despite the positive economic developments.
KOF further noted that the economic environment will make it easier for the Swiss National Bank to end its zero interest rate policy and allow it to gradually start raising short-term interest rates again from 2015 onwards.
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