KOF Raises Switzerland's Economic Outlook

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Friday, the Zurich-based think-tank KOF raised Switzerland's economic outlook for 2009 and next year.

In its Winter forecast, the research institute said the Swiss economy will shrink 2.9% this year, revised from a 3.4% fall estimated in September. The KOF assessed that the recession ended some time during the second half of 2009. The economic growth forecast for 2010 was raised to 0.6% from 0.1%.

Further, in 2011, the gross domestic product will see a growth of about 1.5%, said KOF. Unemployment will then reach its highest level of 4.8%. Private consumption will lose its momentum next year. For 2011, the KOF expects a sharper growth in private consumption.

According to KOF, the pressure on prices will probably remain low. The KOF said the Swiss National Bank will be using its leeway to keep interest rates at the current low level until at least mid-2010. The KOF forecasts a moderate inflation rate of 0.6% in 2010. A slight growth in the inflation rate can be expected for 2011, the think-tank added.

On December 15, Switzerland's State Secretariat for Economic Affairs hiked the growth forecast for 2010 to 0.7% from 0.4%. Experts estimated 1.6% decline in GDP this year, slightly less than the 1.7% fall forecast in September.

Friday, the Zurich-based think-tank KOF raised Switzerland's economic outlook for 2009 and next year. (Market News Provided by RTTNews)