Switzerland to see little direct impact from fuel price hike: report
Switzerland would see little direct impact from sharply higher fuel prices thanks to its value-add economy, the Swiss economics department head said in an interview published Sunday.
By Agencies |
GENEVA: Switzerland would see little direct impact from sharply higher fuel prices thanks to its value-add economy, the Swiss economics department head said in an interview published Sunday.
However, higher fuel prices could dampen economic growth in key Swiss export markets, thereby indirectly impacting its export industry, Jean-Daniel Gerber, who heads the State Secretariat for Economic Affairs (SECO), said in the interview with Swiss newspaper Sonntag.
Gerber said higher fuel prices would translate into "negative effects" for consumers, but "for the local economy it would not be as bad compared to other countries, with the exception of fuel-dependent sectors such as transport".
This was because the Swiss economy is a "very high value-added" one. "The proportion of raw material costs on the final pricing is very small compared to other countries," explained Gerber.
At the same time, fuel price inflation could yet dampen economic growth in major Swiss markets such as the United States, Germany and France, indirectly hurting Switzerland's export industry, he noted.
"All that adds pressure on consumption and could have a big impact on Switzerland as an export country. These indirect effects are for me more worrying," he said.
In another interview published in Zurich-based newspaper NZZ am Sonntag, Swiss central banker Thomas Jordan reiterated that Swiss economic growth was expected to slow to 1.5 to 2.0 percent for this year before picking up in 2009.
For the moment, the central bank also assessed that "an unchanged monetary policy is sufficient to bring inflation back to price stability".
However, Jordan warned against salary hikes to help consumers cope with higher prices, saying that it would only fuel further inflation by driving up demand.
In June, the Swiss central bank held its key interest rates, keeping its growth forecast for 2008 at between 1.5 and 2.0 percent.
But it raised its inflation forecast significantly to 2.7 percent for 2008 from a March estimate of 2.0 percent due to soaring energy prices.
For 2009, the SNB raised its inflation forecast from 1.4 percent estimated in March to 1.7 percent.
However, higher fuel prices could dampen economic growth in key Swiss export markets, thereby indirectly impacting its export industry, Jean-Daniel Gerber, who heads the State Secretariat for Economic Affairs (SECO), said in the interview with Swiss newspaper Sonntag.
Gerber said higher fuel prices would translate into "negative effects" for consumers, but "for the local economy it would not be as bad compared to other countries, with the exception of fuel-dependent sectors such as transport".
This was because the Swiss economy is a "very high value-added" one. "The proportion of raw material costs on the final pricing is very small compared to other countries," explained Gerber.
At the same time, fuel price inflation could yet dampen economic growth in major Swiss markets such as the United States, Germany and France, indirectly hurting Switzerland's export industry, he noted.
"All that adds pressure on consumption and could have a big impact on Switzerland as an export country. These indirect effects are for me more worrying," he said.
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In another interview published in Zurich-based newspaper NZZ am Sonntag, Swiss central banker Thomas Jordan reiterated that Swiss economic growth was expected to slow to 1.5 to 2.0 percent for this year before picking up in 2009.
For the moment, the central bank also assessed that "an unchanged monetary policy is sufficient to bring inflation back to price stability".
However, Jordan warned against salary hikes to help consumers cope with higher prices, saying that it would only fuel further inflation by driving up demand.
In June, the Swiss central bank held its key interest rates, keeping its growth forecast for 2008 at between 1.5 and 2.0 percent.
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But it raised its inflation forecast significantly to 2.7 percent for 2008 from a March estimate of 2.0 percent due to soaring energy prices.
For 2009, the SNB raised its inflation forecast from 1.4 percent estimated in March to 1.7 percent.
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