Swiss Economy Might Not Outpace Germany for a While
- GDP probably expanded 0.5% in 1st quarter, shy of German 0.6%
- Switzerland still suffering from SNB abolishing cap in 2015
An employee feeds a sheet of steel into a cutting machine to make the blades of Swiss Army knives, produced by Victorinox AG, at the company's manufacturing plant in Ibach, Switzerland, on Tuesday, September 9, 2014. The Swiss National Bank's three-year-old cap on the franc has helped the economy outperform that of the euro area in nine of the last 12 quarters.
Photographer: Philipp Schmidli/BloombergIf the Swiss economic growth is still left in the shade by Germany this week, its central bank knows exactly why.
Two-and-a-half years after suffering an exchange-rate shock that made its exports even more expensive, Switzerland has yet to rediscover its knack of outperforming neighboring Germany. While the two economies boast significant similarities, prompting the Swiss to dub their northern neighbor “the big canton,” forecasts suggest it will only be in 2018 that the smaller country can pull ahead once more.