ZURICH (Reuters) – The Swiss economy grew by 0.4% during the first quarter of 2022, the government said on Tuesday, driven by a strong uptick in manufacturing as international demand recovered following the pandemic.
When sporting events were not taken into account, GDP grew 0.5% during the quarter.
Higher inflation and the conflict in Ukraine are yet to dampen the upturn as demand for Swiss machinery, watches and jewellery increased.
The quarterly increase was slightly stronger than the 0.3% growth rate in the fourth quarter of 2021 and expectations for a 0.3% increase. [S8N2XI0B7]
Year on year, Switzerland’s economy grew by 4.2% in the January to March period, up from the 3.6% rate in the fourth quarter of 2021.
“The recovery continued as expected, driven largely by the
industrial sector,” said the State Secretariat for Economic Affairs (SECO), which compiled the figures.
“This was accompanied by stronger growth in goods exports than the historical average.”
Industrial output increased by 1.7%, despite a slowdown in the chemicals and pharmaceuticals sectors, fuelled by strong demand abroad.
Exports increased by 1.4%, driven by higher demand for Swiss precision instruments, watches and jewellery, machinery and metals, SECO said.
Public health measures had significantly less impact on the economy in the first quarter than in previous waves and were already being eased from February onwards, the department said.
Accommodation and food services was the only sector to see a noticeable decline, it added.
Inflation is expected to weigh on Swiss growth towards the end of the year, as higher prices reduce the purchasing power of households and businesses.
Swiss inflation in April reached 2.5%, its highest level since 2008, as energy and food prices increased.
Still, Swiss inflation remains much lower than the 8.1% rate in the neighbouring European Union and a 9% rate in Britain.
The Swiss government in March cut its forecast for economic growth this year to 2.8% due to the Ukraine conflict and higher inflation. It kept its 2023 forecast for growth of 2%.
(Reporting by John Revill; Editing by Michael Shields)
