Switzerland narrowly avoids recession

The Alpine nation's growth prospects have been in doubt since it eliminated its currency ceiling earlier this year

That Jan. 15 decision by the Swiss Central Bank caused the franc to shoot up in value by as much as 20 percent, putting pressure on exporters because it made their wares more expensive for foreign buyers.

That in turn led to a contraction in the first quarter of the year of 0.2 percent. Economists polled by news agencies had expected Switzerland's economy to shrink again in the second quarter by 0.1 percent.

However, thanks to 1.5 percent more investment in equipment and software sectors, the country was able to defy those predictions. Another contributor to the better-than-expected gross domestic product (GDP) results was household spending, which was up as domestic prices slumped.

By the end of the year, the Swiss National Bank (SNB) expects consumer prices to fall by 1 percent, well below the rate of inflation of just under 2 percent that is widely regard among economists as being good for growth.

cjc/uhe (dpa, Reuters)