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Swiss economy contracts in first quarter after franc cap dropped

Switzerland's economy contracted in the first quarter, data showed on Friday, with strong household spending softening what would have been a bigger drop after the central bank allowed the franc to float freely against the euro. 

PHOTO: REUTERS

MAY 29, 20152:10 PM

[ZURICH] Switzerland's economy contracted in the first quarter, data showed on Friday, with strong household spending softening what would have been a bigger drop after the central bank allowed the franc to float freely against the euro.

Gross domestic product (GDP) fell by 0.2 per cent in the first three months of 2015 compared to revised growth of 0.5 per cent in the previous quarter.

Analysts polled by Reuters had forecast GDP change of -0.1 per cent, quarter on quarter. "The trade balance in goods and services in particular delivered negative growth contributions," the State Secretariat for Economic Affairs (SECO) said in a statement.

The GDP data for the three months to March is the first to cover the period immediately after the Swiss National Bank's (SNB) shock decision on Jan 15 to remove its 1.20 per euro cap on the national currency.

REUTERS