(MENAFN- AFP) The Swiss economy contracted by 0.2 percent in the first quarter of this year, the national statistics agency said Friday, as the sharp appreciation of the franc hammered the country's key export sector.
"The trade balance in goods and services in particular delivered negative growth contributions," said SECO in a statement.
Exports of goods fell by 2.3 percent as the Swiss franc jumped in value.
The Swiss central bank (SNB) in January abruptly abandoned its three-year effort to hold down the franc's exchange rate to protect exports, leading it to soar against the dollar and euro, ahead of the ECB's introduction of its massive stimulus programme.
SECO said the drop in exports was visible in "virtually all sectors", with chemicals and pharmaceuticals making a "significant negative contribution".
The categories of machinery, equipment, electronics as well as precision tools, watches, jewellery also reported a fall in exports, it added.
Overall, the trading sector contracted by 1.9 percent, accommodation fell by 3.8 sectors and manufacturing industry dipped by 0.1 percent.
The transportation, information and communication sectors fell by 0.4 percent and the finance sector dropped by 0.6 percent, said SECO.
Household consumption helped attenuate the fall in GDP, rising 0.5 percent, while government spending increased by 0.1 percent.
The Swiss economy grew by a strong 0.6 percent in the final quarter of 2014, and by 2.0 percent overall during the year.
Analysts lowered their growth forecasts after the SNB's move, some even seeing a brief recession, but have recently become less pessimistic.
While Swiss companies are likely to have their margins squeezed, the pick up in the eurozone and US economies should help Switzerland deal with the strong franc.
Both SECO and the KOF Economic Institute think tank both forecast the economy to continue to post modest growth this year.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.