Switzerland lowers growth forecasts

[Geneva] Setbacks for recovery of the eurozone economy are affecting Switzerland which cut its own growth forecasts on Thursday.

The national statistics agency cut its growth outlook for 2014 from 2.0 to 1.8 per cent.

The State Secretariat for Economic Affairs, or SECO, also revised down its growth forecast for 2015, from 2.6 to 2.4 per cent.

"As a result of the continuing fragility of the global environment, in particular the faltering recovery in the Euro region, the Swiss economy has lost some of its momentum since the beginning of 2014," it said.

The wealthy Alpine country has survived years of European financial turmoil relatively unscathed.

But Switzerland, which is not a member of the European Union, has tight trade ties with the 28-nation EU bloc, meaning that weakness in the eurozone can all too easily rub off.

"In light of the dampened short-term economic outlook for the Euro region, including Germany, the conditions deteriorated compared to the last forecasts in June.

Although the economic projections for Switzerland are still relatively firm, the downside risks had increased markedly during the last few months, SECO said.

But it said it expected that the "evolution should be only temporary and that the pace of the economy is likely to gradually pick up again". AFP