ZURICH, Oct 31 (Reuters) - Switzerland's leading growth barometer, the KOF, dropped to its lowest level in over 5 years this month as the global downturn hits exports and consumers spend less, fuelling fears of a recession. The indicator, which points to the economy's likely performance in six months' time, fell to 0.35 in October from a downwardly revised 0.52 in the previous month, the KOF Swiss Economic Institute said on Friday.
This was the lowest since July 2003 and below the median
forecast of 0.49 in a Reuters poll of economists.
"Year-on-year gross domestic product (GDP) growth is likely to be minimal in the near future," the KOF said.
Sub-indicators for exports and the manufacturing industry continued their slide. "The decline in the Swiss consumption sub-module is even more pronounced," the KOF said.
So far, the Swiss economy has been holding up better than its European peers throughout the credit crisis despite its large banking sector.
Low unemployment has supported consumer spending and exports remained healthy due to the Swiss focus on high-quality products and a strong foothold in emerging markets.
But recession fears are mounting and economists are slashing their forecasts as key Swiss markets slow sharply and the soaring Swiss franc puts an extra drag on exports.
The KOF sees the economy slipping into a recession around the turn of the year and growing by a mere 0.3 percent in 2009, ending a five-year-long boom.
(Reporting by Sven Egenter; Editing by Ruth Pitchford)