RTTNews - Tuesday, 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.
The consumption indicator increased to 0.96 in June from 0.75 in May, revised from 0.77 reported initially. But, it remained below its long-term average of 1.50 for the ninth consecutive month.
While the indicator's level hints at a modest expansion in Swiss private consumption, the environment for the coming months remains difficult, UBS said.
The rise in consumption indicator for June is mainly due to an increase in new car registrations and an anticipated rise in the number of domestic overnight stays.
The UBS said unemployment is likely to increase significantly in the coming months, which will have a negative impact on consumption tendencies. However, low inflation gives some hope for consumers and is likely to have a positive influence on purchasing power.
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.
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