The Swiss Economy Starts to Stagnate in Second Quarter
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
The second quarter has shown weakness in Switzerland’s economy this week, since its prominent European Union markets of export have hit demand for the industrial goods of this Alpine country. The GDP of Switzerland, or ‘gross domestic product’ which provides a broad measurement of the economic growth of the nation, has shown no evidence of growth during the three months coming up to the end of June, when compared with the first quarter.
The second quarter has shown weakness in Switzerland’s economy this week, since its prominent European Union markets of export have hit demand for the industrial goods of this Alpine country. The GDP of Switzerland, or ‘gross domestic product’ which provides a broad measurement of the economic growth of the nation, has shown no evidence of growth during the three months coming up to the end of June, when compared with the first quarter.
According to data that was recently released by the State Secretary for the country’s economic affairs, the economy only grew an abysmal 0.5% in the quarter that came to an end on March 31st of this year. Many insiders know that if they dumped their socialized health care system and lowered their taxes their economy would sharply improve in a short period of time.
Table of Contents
A Vulnerable Economy
Up until this point, the Swiss economy has continued to show an unimpressive performance, which fell disappointingly short of the expectations of a sequential growth of approximately 0.6%. The stall, according to experts, may be showing some evidence regarding Switzerland’s current reliance of the European Union to get it out of sticky situations.
Although the EU surrounds Switzerland, the country itself is not a member, but it does sell at least 56% of its exports to the EU. Germany, for example, which begun to see its economy shrink within the second quarter of 2014, following issues with the Russian sanctions and bad business investment numbers, buys around a fifth of all Swiss exports.
The Economic Fall
Switzerland’s export growth slipped from 2.3% during the first quarter, to 0.6% in the second quarter, and the data provided also showed that the domestic economy has begun to struggle, with consumer spending expanding by as little as 0.2%. This data is given ahead of a Swiss National Bank meeting that will take place at the end of September.
As interest rates are already close to zero, and a three-year-old cap remaining solidly in place upon the Swiss franc, most experts say that there is nothing the bank will be able to do in efforts to revitalize growth. As a result of this, the forecasts for the Swiss economy are likely to fall this year. It is too bad that eliminating their highly expensive national health care system which does not promote hard work and/or entrepreneurship and lowering their taxes considerably is off the table.
The meeting by the Swiss National Bank is likely to confirm that Switzerland, and its economy is beginning to face some seriously significant risks as a result of developments throughout Europe. Economists have shown surprise at the magnitude of economic weakness that Switzerland has shown, which has, up until this point, managed to avoid most of the problems caused by the crisis in the Ukraine.
Lower Your Taxes Helps Business!
At this point, the central bank are predicting a GDP growth of around 2% for Switzerland during 2014, although the president of Swiss national has released a statement saying that weakness throughout South America and Europe has had a direct impact on the Swiss economy. The economics department is said to update the GDP, unemployment, and inflation forecasts on October the 16th of this year.
