ZURICH, Dec 29 (Reuters) - Switzerland's leading KOF growth barometer fell to a new 5-1/2-year low in December as exports declined further and consumption softened, adding to signs that the Alpine country was heading for recession.
The KOF growth indicator, which points to the economy's likely performance in six months time, fell to -0.39, the lowest level since April 2003 and down from an upwardly revised -0.04 in November, the KOF Swiss Economic Institute said.
"Swiss gross domestic product (GDP) in the first quarter of 2009 can be expected to be lower than in the first quarter of 2008," the KOF said.
The decline in the sub-indicator for exports gained momentum, the KOF said. The indicators for the manufacturing sector and for the construction industry and for consumption also fell.
Economists surveyed by Reuters had expected the indicator to
come in between -0.62 and -0.15, with the median reading of 10
economists at -0.25.
Most economists now see the Swiss economy following its main trading partners such as Germany into a recession. The Swiss National Bank expects the economy to shrinking between 0.5 and 1.0 percent in 2009 after growing nearly 2 percent in 2008.
The SNB has slashed its target rate for the 3-month Swiss franc LIBOR by 2.25 percentage points to just 0.5 percent since early October and indicated it would turn to unconventional easing measures if necessary to fight the looming recession.
BACKGROUND
For a story on Swiss economy click on [LEN-RTRS-MCE-CH]
For a table of Swiss economic indicators... [ID:nL02893077]
For recent Swiss National Bank comments [ID:nSNBQUOTES]
(Editing by Mike Peacock)