Switzerland's economic growth continued in the fourth quarter of 2006 as real gross domestic product (GDP) rose by 0.5% compared to the previous quarter, driven mainly by financial services and private consumption, the federal government has announced.
On the expenditure side, the government said that the increase in GDP is primarily due to the positive evolution of private consumption and investments in fixed assets and software. On the production side, there were extremely positive impulses from added value generated by the financial sector. In comparison with the same quarter of the previous year, real GDP rose by 2.2%.
Total investment expanded by 0.5% compared to the previous quarter. While investment in fixed assets and software (+1.3%) recorded a rise in all areas, with the exception of telecommunications, real investment in construction fell by 0.5% due to a slacking off of dynamism in house building.
The expansion in exports of goods and services rose in Q4 to 3.3%, with sharp rises in exports of goods (+3.7%) and of services (+2.2%). After two weak quarters, imports of goods and services recorded record growth at +9.5%, which is largely due to goods imports (+10.7%). There was however also a clear increase in imports of services (+3.2%).
On the production side, value added in the sector dominated by financial market services grew strongly (+2.5%). Following a rather modest previous quarter, the sector's contribution to GDP growth has once again been significant. In addition, the trade, hotels and restaurants, transport and communications (+0.5%), construction (+0.4%) sectors and the sector dominated by public services (+0.2%) also saw their value added increase. The sector dominated by industry on the other hand experienced a stagnation due to a downturn in the energy and water supply subsector. In agriculture, value added fell again by 1.6%, albeit in a limited manner.
Compared to the corresponding quarter in the previous year, the GDP deflator rose by 2.1%. The final consumption deflator rose by 1.0% and prices for fixed asset and software goods stagnated (0.0%) following a lengthy downwards trend. In contrast, construction prices rose strongly (+3.7%). In the foreign trade sector, export prices rose by 3.1% and those for imported goods rose by 3.2%.
Based on the outcomes of the quarterly estimates, an initial provisional calculation of the yearly average growth rate in real GDP for 2006 was 2.7% (at constant previous year prices and 4.2% at current prices). In 2005, provisional results of the national accounts (Swiss Federal Statistical Office) had shown a rate of 1.9% (at constant and at current prices).
According to the government, the composition of GDP growth in the previous quarters clearly shows that the good economic performance of the Swiss economy has to date been highly dependent on the contribution of the financial sector. Value added in other sectors has been positive, although its evolution has not been especially pronounced.
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