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Swiss government sees slow economic recovery in 2016 and 2017

[ZURICH] The Swiss government on Thursday trimmed its growth forecasts for this year and next year due to a weaker global economic outlook.

Swiss economic growth for 2016 is now seen at 1.4 per cent in 2016 compared to a forecast in December of 1.5 per cent, the State Secretariat for Economic Affairs (SECO) said. It sees 2017 growth at 1.8 per cent compared to 1.9 per cent previously.

"The negative exchange rate effects are expected to gradually diminish in the course of 2016 and 2017," SECO said in a statement. "In contrast, the international economic context has lost momentum in recent quarters and there is no clear sign of a marked acceleration of global growth."

SECO cut its inflation forecast for this year to -0.6 per cent from -0.1 per cent. It still expects consumer prices to start rising again in 2017, forecasting inflation of 0.2 per cent, unchanged from December.

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The forecasts come ahead of the Swiss National Bank giving its quarterly policy assessment at 0830 GMT. All 37 economists in a Reuters poll predicted the SNB would keep its target range for three-month Swiss Libor at -1.25 to -0.25 per cent.