Charlotte de Montpellier, Economist at ING, notes that Switzerland’s GDP grew by 0.7% quarter-on-quarter in 2Q18, a dynamic and above-average growth rate.
Key Quotes
“Moreover, 1Q18 growth figures were strongly revised upwards to 1% qoq, from a previously estimated 0.6%. Annual GDP growth reached 3.2% year-on-year in both the first and second quarter.”
“The Swiss economy has recorded an above 0.7% qoq growth rate for the fifth quarter in a row. This has not been the case since the beginning of 2015 when the exchange rate floor against the euro was abolished.”
“The main driver of growth in 2Q18 was manufacturing (+1.5% qoq), which benefited from robust foreign demand and the depreciation of the Swiss franc in the second quarter.”
“The world cup had a strong influence on the GDP growth rate in 2Q18.”
“Given that the World Cup took place this year in June and July, it had an effect on GDP data for the second quarter of 2018. According to the Swiss administration, the Swiss economy grew by 0.5% qoq in 2Q18 adjusted for sporting events, compared to 0.7% qoq without the adjustment.”
“All in all, we believe GDP will stay robust but won’t grow faster in the following months. After a strong first half of 2018, GDP growth is likely to approach 3% this year.”
“After a long deflationary period, CPI inflation has been in positive territory since January 2017.”
“After having reached a level of 0.5% in 2017, CPI inflation is expected to climb to a modest 0.9% in 2018 and 1% in 2019.”
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