By John Revill
ZURICH (Reuters) – The Swiss economy grew by a better than expected 0.5% in the fourth quarter, the government said on Thursday, as the country’s pharmaceuticals sector compensated for weaknesses elsewhere in the rest of the export-orientated economy.
The quarterly figure, which was adjusted for sporting activities, was an improvement from the 0.2% rate in the third quarter and better than the 0.2% forecast in a Reuters poll.
Switzerland is home to several major international sports organisations, including soccer’s global governing body FIFA, and their activities and value-added contribute to Swiss gross domestic product.
The chemicals and pharmaceuticals sector increased its output by 2.7%, which contributed to an increase in exports, said the State Secretariat for Economic Affairs (SECO), which compiled the figures.
“In the other industrial sectors, value added essentially stagnated,” SECO said.
Despite an improvement at the end of the year, Switzerland’s economic performance was held back by a weak start to 2024, reducing its annual economic growth to 0.9%, SECO said.
This was a decline from the 1.2% rate in 2023, and was half the country’s long-term average growth rate of 1.8%.
The traditionally resilient Swiss economy came under pressure last year as it struggled with weaker demand elsewhere, particularly in Germany and China.
On Wednesday, Swissmechanic – the association representing small and mid-sized manufacturers – said tough conditions were continuing, with nearly 60% of companies seeing a decline in new orders.
“The mood in industry is quite negative at the moment – the crisis has been going on since April 2023 and many companies don’t see signs of an improvement,” said Swissmechanic President Nicola Tettamanti.
“They are struggling because their main markets in Germany and China are down, there is overcapacity among customers and areas like the automotive sector have gone into complete shock in Europe,” said Tettamanti, adding that companies were cutting back on investments and hiring.
(Reporting by John Revill, Editing by Friederike Heine and Emelia Sithole-Matarise)
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