(Bloomberg) -- Switzerland's economy unexpectedly expanded at the end of last year, with foreign demand for its goods helping offset the impact of lockdown measures to control the pandemic.
Gross domestic product increased 0.3% in the fourth quarter, compared with estimates for a stagnation in a Bloomberg survey of economists.
“On the whole, the second wave of the coronavirus until the end of 2020 had much less of an impact on the economy than the first wave did last spring,” the State Secretariat for Economic Affairs said.
Still, SECO Deputy Director Eric Scheidegger said the economy would likely shrink in the first quarter of this year. The government shut restaurants and leisure facilities late in 2020 to stem Covid-19 infections.
| 3Q | 4Q | |
|---|---|---|
| Swiss GDP (SA, Q/Q) | 7.6 | 0.3 |
| Private consumption | 12.2 | -1.5 |
| Government consumption | -0.1 | 2.3 |
| Equipment investment | 9.4 | 1.9 |
| Exports (excl. valuables, transit trade) | 9.7 | 3.0 |
Although officials will reopen non-essential shops on March 1, a slow vaccination drive could delay the recovery.
At the same time, the weaker franc could buttress momentum. It has fallen to the lowest against the euro since 2019 as investors dump haven assets to position themselves for a global economic rebound and higher prices.
Read more: Swiss Franc's Pummeling From Reflation Trade Eases SNB Headache
GDP contracted by an inflation-adjusted 2.9% last year, the biggest decline since the 1970s. Output isn't likely to return to its pre-crisis level until 2022, according to the central bank.
Despite its deep dive due to the pandemic, the well-diversified Swiss economy still fared better than some of its neighbors in 2020. Government aid programs have kept a lid on unemployment and supported consumer spending.
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