Swiss economy grew by 0.4% in the second quarter versus the first three months of the year, the weakest trend since 2009, and will slow down in the third quarter, as the exports feel the impact of the strong franc appreciation and slowdown of the world economy, writes Reuters.
Gross Domestic Product (GDP) of Switzerland grew by 2.3% in the second quarter in comparison to the same period of last year, according to data presented Thursday by the State Secretariat for Economic Sciences.
Analysts previously contacted by Reuters estimated a quarterly growth of 0.4% and an annual advance of 2.4% compared to 0.6%, respectively 2.5% in the first three months of this year.
Swiss franc has appreciated by over 6% against the euro in the second quarter and by another 16% in July and August.
Swiss franc has made a big leap comparing to major currencies
The Swiss franc is considered an asset with low yield but very safe compared to other investments. Frightened by the state debt crisis in the euro area, the uncertain economic situation in the U.S. and the possibility of a new round of global recession, investors have massively withdrawn money from equities, commodities, currencies and other volatile assets, choosing heavily the gold, Swiss francs and Japanese yen.
The three “safe-haven” actives have climbed to historic highs against the dollar and euro on several occasions in recent weeks.
Exports account for about half the GDP of Switzerland, and companies in this sector, major producers and employers in the economy, are accusing severe problems due to uncontrolled appreciation of the currency. The situation is even worse in Japan, the third largest economy in the world and one of the largest exporters of electronics, auto parts and automobiles, industrial equipment and machinery, where the yen has entered a strong uptrend against the dollar and euro since the outbreak of the global financial crisis in 2008.
In Eastern Europe, the franc appreciation creates serious problems for individuals and companies who have taken loans in Swiss currency, attracted by the low interest rates and relatively stable exchange rate in the period preceding the crisis.