ZURICH: Swiss economic growth accelerated more than economists expected in the first quarter, joining the upturn seen across much of Europe at the start of the year.
In line with pickups in Germany and the euro area, gross domestic product rose 0.6%, beating even the most upbeat forecast in a Bloomberg survey of economists.
The expansion was driven by above-average growth in consumer spending, which rose the most in a year, as well as construction and investment.
The fourth-quarter reading was revised up to 0.3%, according to the State Secretariat for Economic Affairs.
Even with the strong first-quarter showing, there’s downward pressure on the economy amid a global slowdown and escalating trade tensions that have hurt business confidence and demand.
In Switzerland, the manufacturing Purchasing Managers Index is at its lowest since 2015 and the KOF’s business situation index has fallen for five straight months.
Exports dropped 0.6% in April, a second consecutive decline, according to a separate release on Tuesday, though they had surged in January and February.
The Swiss National Bank has also warned of the likelihood of Switzerland suffering from the impact of trade tensions.
One major repercussion could be another appreciation of the franc, with implications for exporters in the small, trade-reliant economy.
Swiss Economy Overview 4Q 2018 1Q 2019 Household consumption 0.3% 0.4% Government consumption 0.3% 0.3% Equipment & software investment, 0.1% 1.5% Exports of goods excluding merchanting, valuables 6.4% 1.2% Imports of goods excluding valuables 0.8% 2.4% Gross domestic product 0.3% 0.6%
The SNB is using a deposit rate of minus 0.75% plus a pledge to intervene in currency markets to control the franc.
Still, the currency rose last week to its strongest since early April amid a fresh bout of investor risk aversion.