IMF Review Sees Upswing For Swiss Economy

by Ulrika Lomas, Tax-News.com, Brussels

08 March 2002

In its annual review of the Swiss economy, the International Monetary Fund (IMF) has predicted economic growth during the second half of 2002, and has suggested that the country may avoid a full-blown recession.

The IMF report revealed that growth of just under 1% is expected this year, which is slightly below the estimates issued by the Swiss Government, which predicted growth of 1.3%.

GDP figures released by the State Secretariat for Economic Affairs (SECO) on Thursday have also proved stronger than expected, with fourth quarter gross domestic product for 2001 up 0.1% on the third quarter figures.

However, although SECO's growth predictions are more optimistic than the IMF's 0.8% to 0.9% estimate, the Secretariat warned that the Swiss economy is still sluggish, and is likely to remain so in the short term.

These announcements have raised speculation about when the Swiss National Bank, which meets later this month to discuss monetary policy, might raise interest rates. However, the SNB has hinted that with no firm indication of recovery as yet, there is unlikely to be any immediate change following the March 21 meeting.

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