The forward-looking Swiss KOF economic barometer slipped to its lowest reading in two years in July, data published on Friday showed, indicating a sluggish development for one of Europe's traditionally more robust economies.
The barometer, compiled by the KOF Institute at the Federal Institute of Technology (ETH) in Zurich, fell 5.1 points to 90.1 points in July, the third month in a row below the 100 point level and its lowest reading since July 2020.
A figure below 100 points to below-average economic activity in the analysis, which indicates the health of Swiss economy in about six months time.
"After a moderate drop in the previous month, the fall is now accelerating again," KOF said. "The Swiss economy is likely to develop sluggishly in autumn."
KOF economist Klaus Abberger said there was a broad-based slowdown under way, with manufacturing and services reporting lower activity.
"We just come out from corona pandemic recovery and now we are seeing a weaker international environment, especially in Europe, which is being affected by the war in Ukraine and higher energy costs," Abberger told Reuters.
"We had hoped the U.S could compensate for a weaker Europe, but its economy is slowing down as well."
Abberger said he expected the economy to perform more weakly than previously expected for the rest of the year.
"The risks have increased, especially with regards to the supply of gas to Europe, but we do not expect a sharp recession in Switzerland," he said.
The Swiss government last month downgraded its economic growth forecasts, warning risks stemming from the war in Ukraine and food and energy inflation have increased.
The U.S. economy unexpectedly contracted in the second quarter, with consumer spending growing at its slowest pace in two years and business spending declining, raising the risk that the economy was on the cusp of a recession. (Reporting by John Revill, Editing by William Maclean)