Swiss GDP Unchanged In Q3, Significantly Below Expectations

Swiss GDP was unchanged in the third quarter of 2016 following a 0.6% gain the previous quarter and was below market expectations of a 0.3% advance. The year-on-year advance was also lower than expected at 1.3% from 2.0% previously.

Consumer spending increased 0.1% for the quarter with a decline in spending on housing and energy. There was also a small decline in government spending for the quarter.

There was an increase of 0.5% in investment spending and there a recovery in construction spending following two successive quarterly declines.

There was a decline in exports of 0.2% for the quarter as imports advanced with the trade data having a negative overall impact on GDP.

There was another negative reading for the price deflator with prices declining 0.6% for the quarter, although the rate of decline did slow down and there was an increase in import prices. The data continues to suggest a slight underlying easing of deflationary pressures within the economy.

On the production side, the growth in value added was below the historical mean in most sectors and there will be further unease surrounding competitiveness issues with pressure to cut costs.

The data is disappointing, although it followed a notably robust second quarter and the data is also prone to upward revisions. There was no significant market reaction with EUR/CHF trapped below 1.0800.

Tim is a contributing author to He is an economist and has been involved in financial markets for over 20 years as an analyst. He specialises in global economic trends, macro policy and central banks. Extensive knowledge, experience and data mining is used to anticipate trends in equities, bonds and forex with a contrarian slant. He is a graduate of the University of York with a degree in Economics/Econometrics.