Swiss economy stalls
The Swiss economy has stagnated in the second quarter of 2014, being hit by weakened eurozone exports, according to the Swiss Federal Department of Economic Affairs.
The stagnation comes despite an earlier growth forecast of 2% by the Swiss National Bank (SNB). Real GDP growth remained unchanged compared to the previous quarter, with both imports and exports increasing by 0.7%, the balance of trade made a negative contribution to GDP growth.
The SNB’s cap on the Franc has helped Switzerland to outperform Eurozone GDP growth for most of the last three years. Yet the recent weakness of the Euro has had a detrimental impact on Swiss exports, with the Euro reaching a 20 months low versus the Swiss Franc, raising pressure on the SNB to intervene in order to maintain the cap.