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UPDATE 1-Swiss economy rebounds to near pre-pandemic levels in Q2

reuters.com · 09/02/2021 03:55
UPDATE 1-Swiss economy rebounds to near pre-pandemic levels in Q2

Adds detail, background

By Brenna Hughes Neghaiwi

- The Swiss economy grew by 1.8% in the second quarter versus the first three months of 2020 as easing COVID-19 restrictions helped reverse two consecutive quarters of declines, official data showed on Thursday.

Loosening curbs boosted private consumption and services like catering and domestic tourism.

"In the second quarter, total GDP was only 0.5% lower than the pre-crisis level seen in the fourth quarter of 2019," the State Secretariat for Economic Affairs (SECO) said.

Overall, GDP rose 7.7% year-on-year from April through June. ID:nS8N2MM003

That fell short of economists' expectations for 9.0% growth in a Reuters poll, while quarterly growth also missed estimates for 2.0%.

The Swiss government raised its economic growth forecast in June, as easing coronavirus restrictions helped boost confidence in the recovery and hopes GDP could surpass pre-crisis levels sooner. It saw 3.6% growth this year. nS8N2MD0C0

However, Switzerland has been hit by a "very worrying" fourth wave of COVID-19, and the finance ministry has cautioned further waves of the virus could yet pose significant risks to the public purse and overall recovery. nL1N2PV0UH nS8N2OX03K

The government has thus far held off on introducing further restrictions despite rising case numbers. nL1N2Q30PR

The economy had contracted by 0.4% in the first quarter of 2021 on a revised basis and by 2.4% in 2020. nL5N2NJ1OC

SECO said service sectors that had been most affected by restrictions added the most value in the second quarter, with accommodation and food services up 48.9% and arts, entertainment and recreation up 52.9%, albeit both remaining below pre-crisis levels.

Manufacturing and the export of goods also had marked increases, albeit at lower rates than the pronounced pickups in the first months of the year.

Inflation has been picking up in Switzerland, with consumer prices rising 0.9% year-on-year in August and 0.2% compared with the month before. nS8N2PI02V

The Swiss National Bank is set to hold its next policy meeting on Sept. 23, deciding whether to keep its ultra-low interest rates.

(Reporting by Brenna Hughes Neghaiwi; Editing by Michael Shields)

((brenna.neghaiwi@thomsonreuters.com; +41 58 306 77 35;))