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Swiss Economy May Not Avoid Recession, Say Experts

by Ulrika Lomas, Tax-News.com, Brussels

18 December 2001


It looks as if tax hikes and belt tightening may be the order of the day in Switzerland for the New Year, as economists have warned that the country's economy is teetering on a knife edge, and a fall into recession may be unavoidable.

This time last year the Swiss economy experienced almost unheard of growth rates of around 3%, but the global economic downturn and the events of September 11th have taken their toll. On Thursday, the State Secretariat for Economic Affairs (SECO) announced that in the third quarter of this year, GDP had grown by just 0.1% compared with the previous three months.

According to Swiss analysts, the scale of this year's downturn has taken the country by surprise, and left many disillusioned with European monetary union. Speaking on Monday to Swissinfo, Marcus Allenspach, an economist at Cantrade private bank explained:

'The biggest frustration is that Europe has shown that it is not immune to the United States slowdown,' he observed. 'With European monetary union, it was pretended that Europe was now a bloc of its own with the result that its economic course would be the result of developments in Europe alone.'

According to the economists, consumers are keeping the Swiss economy's head above water for the moment, but it is doubtful whether this will continue into 2002, especially if the situation continues to weaken.


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