Swiss Growth Seen Slowing This Year and Next

The growth of the Swiss economy will likely slow to 2.2 pct this year and 1.9 pct in 1988 after reaching 2.8 pct last year, according to a study by a group at Basle University’s Institute of Applied Economics.

It blamed the expected slowdown partly on a disappointing outlook for exports caused by the weaker dollar. Exports would likely grow by 2.8 pct this year and by 3.0 pct in 1988, after 3.0 pct in 1986, the group predicted.

Final domestic demand will also fall back, to a likely 3.0 pct this year and 2.3 pct next, after 4.1 pct in 1986. However, the domestic picture will likely be mixed.

The study said investment in plant and equipment would continue to be the main motor for the growth in domestic demand, although it was unlikely to grow as fast as last year’s 7.4 pct, rising this year by 4.5 pct and by 2.8 pct in 1988.

While the growth in private consumption is expected to fall back to 2.5 pct this year and 2.1 pct in 1988 from last year’s 3.1 pct, public consumption spending will likely grow by 1.9 pct in 1987 and 2.0 pct next year, after 1.5 pct in 1986.

Consumer prices were seen rising by 1.7 pct this year and 2.4 pct in 1988, after just 0.8 pct in 1986. Unemployment should fall back to 0.7 pct from last year’s 0.8 pct.