RTTNews - Tuesday, the UBS bank said its consumption indicator for Switzerland dropped in May, indicating that consumer spending in the country is set grow at a slower pace.
The consumption indicator dropped to 0.77 in May from 0.91 in April. It continued to remain below its long-term average of 1.50 for the eight consecutive months.
According to the UBS, the decline in May was mainly driven by a 15.3% annual fall in new car registrations and by a gloomy consumer sentiment, two of the five sub-indicators of the consumption indicator. At the same time, the effect of a decline in the number of domestic hotel overnight stays was offset by an improvement in retail sales.
The UBS said unemployment is likely to increase significantly in coming months, reducing households' purchasing power. However, falling inflation gives some hope for consumers. The bank forecasts consumer spending in Switzerland to rise 0.4% in 2009 following a 1.7% increase in 2008.
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