Charlotte de Montpellier, economist at ING, explains that Switzerland’s GDP growth was surprisingly negative in 3Q18, after 0.9% quarter-on-quarter growth in 1Q18 and 0.7% growth in 2Q18.
Key Quotes
“The -0.2% QoQ GDP growth abruptly interrupted a series of five quarters of above 0.7% QoQ GDP growth and is the worst performance of the Swiss economy since 1Q15. The contraction of GDP was due to several negative elements – both domestic and external demand were drags to economic growth.”
“The negative trade contribution is linked to the weak growth observed in 3Q in Europe, and especially in Germany. Domestic demand also contributed to the fall in Swiss GDP, mainly because of a decline in investment in equipment and software. Household consumption hardly increased, as it was still held back by weak real wage growtth. Indeed, nominal wages rose more slowly than inflation, despite the low 2.6% unemployment rate in 2018.”
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