RTTNews - Sentiment amongst Swiss consumers deteriorated as expected in the third quarter to the lowest level since July 1993 on weak assessment of the general economic situation.
Consumer confidence deteriorated to minus 42 in the July quarter from minus 38 in the prior quarter, a survey based on 1,100 households from the State Secretariat for Economic Affairs revealed Thursday. The reading matched economists' expectations.
Among sub-indicators, the estimate of the financial situation of households over the last twelve months eased and the assessment of general economic situation over the past twelve months stood at minus 100 points, down from minus 96 in the prior quarter. The development of the household budget for the coming 12 months was also less favorably evaluated.
On the other hand, the general economic outlook for the coming twelve months rose to minus 33 in the July quarter from minus 64 in April and consumers' view of their own savings edged up by a point to 37.
Timing of major purchases improved to zero from minus 2 points in the second quarter. The indicator measuring job security stood at minus 125 points, up from minus 127. But, the index also stayed below its long- term average.
On July 28, the UBS bank said its consumption indicator for Switzerland increased in June, indicating that consumer spending in the country slightly improved after a 12-month downswing. That said, the UBS does not view the recent recovery to mark a turnaround and expects the economy to continue shrinking until 2010. The bank still expects consumer spending to rise a modest 0.4% for 2009 after a 1.7% growth in 2008.
A SECO report released in July showed that the jobless rate rose to 3.8% in June from 3.5% recorded in May. The adjusted number of unemployed in June rose 5,125 from May to 140,253.
Consumer prices in July recorded the biggest fall since August 1959. The consumer price index slipped 1.2% annually in July, severe than the 1% decrease seen in June. Month-on-month, prices dropped 0.7% in July on clearance sales, in contrast to June's 0.2% increase.
Last month, the Zurich-based think-tank KOF had lowered its Swiss gross domestic product forecasts. The KOF sees a contraction of 3.3% in the Swiss GDP for 2009, worse than its March's forecast of a 2.4% shrinkage. For 2010, the research institute expects a GDP decline of 0.6%.
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