2020.12.0106:30:00UTC+00Swiss Economy Recovers At Faster Than Expected Pace

The Swiss economy expanded at a faster than expected pace in the third quarter following the gradual easing of the Covid-19 containment measures, the State Secretariat for Economic Affairs, or SECO, reported Tuesday.

Gross domestic product grew 7.2 percent sequentially, offsetting the 7 percent decrease logged in the second quarter. This was also faster than the 5.9 percent expansion expected by economists.

Nonetheless, GDP was around 2 percent below the pre-crisis level.

Year-on-year, GDP was down 1.6 percent but much slower than the 7.8 percent fall seen in the previous quarter and economists' forecast of -3.3 percent.

Domestic demand and parts of the service sector recovered significantly, while international developments had an adverse impact on exports.

On the expenditure-side, data showed that private consumption climbed 11.9 percent. Investment in equipment advanced 8.8 percent and investment in construction grew 5.1 percent.

As expected, final domestic demand registered record growth of 8.9 percent, still falling short of its pre-crisis level at the end of 2019 by around 2 percent, the SECO said.

Imports of goods were up 11.2 percent and that of services climbed 9.9 percent. As some restrictions remained in place over summer, exports of services gained only 1.4 percent. At the same time, exports of goods grew 6.9 percent.

The central bank expects the Swiss economy to shrink by around 5 percent this year. The positive development in the third quarter is forecast to continue in 2021.