Private spending in Switzerland

Private spending in Switzerland increased 3.6% in December after posting a 1.4% drop in the previous month however, as the Swiss National Bank expects the economy to face its worst economic downturn in over a quarter century, the outlook for personal consumption remains bleak. A deeper look at the report showed sales fell 0.5% after adjusting for the number of shopping days as demands for personal goods plunged 20.0% from the previous year, while spending on furniture dropped 4.6%, and the rise in the headline reading was driven by a 12.6% increase in purchases of electronic goods as consumers took advantage of discounted prices. As policymakers expect economic activity to deteriorate further throughout the year, the Swiss National Bank is likely to take additional steps to shore up the economy, and may cut the benchmark interest rate by 25bp to 0.25% as the outlook for growth and inflation falter.