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Swiss economy grows at weakest pace since late 2009

[ZURICH] Switzerland's economy grew at its slowest annual rate in nearly eight years during the second quarter, government data showed on Tuesday, as tepid public spending and weaker foreign trade weighed on the export-reliant country.

Year-on-year economic output growth halved to 0.3 per cent from the 0.6 per cent rate at the start of the year, the State Secretariat for Economic Affairs (Seco) said.

That missed even the lowest estimate in a Reuters poll of economists who on average expected 1.1 per cent and marked the lowest annual growth since the end of 2009, according to Thomson Reuters data.

Output increased by 0.3 per cent in April to June compared with the first three months of the year, Seco said.

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The figure, which missed the average estimate of 0.5 per cent in the Reuters poll, was up from a downwardly revised 0.1 per cent during the first quarter.

"Manufacturing, the financial sector and the hotel and catering industry significantly boosted growth while developments in trade, public administration and the healthcare sector were sluggish," Seco said in a statement.

Switzerland's trade balance shrank during the quarter, weighing on the country which derives roughly two-thirds of its economic activity from selling products abroad.

While exports of goods slightly increased, exports of services like patents and licences declined, Seco said.

Meanwhile goods imports rose sharply, driven by a considerable growth in imports of chemical and pharmaceutical products.

In June the Swiss government lowered its forecast for 2017 economic growth to 1.4 per cent from 1.6 per cent, saying recent improvements had fallen short of expectations.

The economics ministry is due to give its next forecast for Swiss annual GDP on Sept 21.