http://www.bloomberg.com/apps/news?pid=20601068&sid=attGgcHHsvYs&refer=economyDec. 1 (Bloomberg) -- Swiss economic growth unexpectedly slowed in the third quarter to the weakest pace since the three months through March 2005, led by a drop in investments, as the central bank prepares to raise interest rates further this month.
Gross domestic product, adjusted for price changes and seasonal swings, rose 0.4 percent from the second quarter, when it gained a revised 0.6 percent, the State Secretariat for Economic Affairs in Bern said today. Economists forecast growth of 0.7 percent, according to the median of 15 estimates in a Bloomberg News survey.
The Swiss economy, headed for its strongest expansion since 2000, may become increasingly reliant on consumer spending with a European slowdown clouding the outlook for exports. The Swiss National Bank, which has signaled it's ready to raise its key rate for a fifth time over the past year this month, may find it difficult to push through further increases as growth cools.
``It's a negative surprise at the end of the day,'' said Reto Huenerwadel, an economist at UBS AG in Zurich. ``We're even below the European average, which makes it difficult for the SNB to keep on raising rates beyond this month.''
European Slowdown
The economy of the dozen nations sharing the euro, destination for about two thirds of Swiss exports, expanded at 0.5 percent in the third quarter, unchanged from the second. Germany, Europe's largest economy, cooled to 0.6 percent from 1.1 percent.
From a year earlier, GDP, the measure of all goods and services, grew 2.4 percent, down from 3 percent in the previous quarter. Economists forecast an expansion of 2.9 percent. The quarterly figure was revised down from 0.7 percent.
``The growth figures were somewhat below expectations, but the economy is still robust,'' said Marcus Hettinger, a currency strategist at Credit Suisse Group in Zurich.
Swiss growth may cool to 2.2 percent next year from 3 percent in 2006, the Paris-based OECD said in its semi-annual economic outlook this week. In comparison, the euro region may expand 2.6 percent this year and 2.2 percent in 2007, it forecast.
A 2.1 percent drop in the Swiss franc against the euro this year is making goods more competitive in Europe, the market that buys two thirds of goods sold abroad, even as growth there slows. Exports, which account for half of Swiss GDP, rose 2.8 percent in the third quarter from the second.
Exchange Rate
The Swiss franc was little changed at 1.5864 versus the euro after the report. The Swiss currency traded at $1.1956.
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