Geneva, Switzerland (AHN) – The worsening eurozone crisis caused Swiss government officials Tuesday to lower the nation’s expected economic growth forecast for 2012.
They now predict that the gross domestic product will only grow by 0.5 percent instead of the 0.9 percent previously forecast.
However, the government remains optimistic that Switzerland will not experience a recession as long as the eurozone crisis does not become worse. They forecast economic expansion of 1.8 percent for 2011, which is still down from the 2.7 percent recorded in 2010
Nevertheless, there is ongoing concern over recession and deflation.
The Swiss National Bank has acted to weaken the Swiss franc since summer, citing those concerns. The central bank acted after investors drove up the value of the franc because they viewed it as a safe currency.
Central bank officials set a floor exchange rate of 1.2 Swiss francs to the euro in September, which helped Swiss exporters. Government officials forecast export growth for 2012 will drop to 0.4 percent from 3.4 percent for this year.
Analysts now wonder if the Swiss National Bank will act to weaken the Swiss franc again. However, the central bank has not yet made any announcement regarding the matter.
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