RTTNews - Tuesday, the UBS bank said its consumption indicator for Switzerland continued its downward trend in July following last month's temporary rise.
The indicator dropped to 0.77 in July from 0.95 in June, representing the tenth time in a row it has registered below its long-term average of 1.5. The bank said all five components of the the consumption indicator contributed to the renewed decline.
The indicator's level hints at a modest expansion in Swiss private consumption, but the environment remains difficult.
Unemployment is likely to continue to increase significantly in the coming months over the course of the economic downturn, negatively impacting consumption tendencies. Continuing low inflation will likely enhance purchasing power, however, offsetting in part the current slowdown in private consumption, the UBS said.
The UBS said it does not foresee a reversal in the trend for the near future and anticipates that consumption will instead continue to decline into 2010. Following last year's 1.7% real increase in consumer spending, the UBS now forecast a more modest increase of 0.4% for 2009.
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