(Corrects month in 4th paragraph to June from July)
By Joshua Franklin
ZURICH, Sept 6 Switzerland's economy grew in the
second quarter at the fastest pace since its central bank sent
global foreign exchange markets into a frenzy by abruptly ending
its cap on the Swiss franc, figures showed on Tuesday.
The Swiss National Bank's abrupt decision on Jan. 15, 2015
to end a cap on the franc's value of 1.20 per euro sent
Switzerland's currency soaring.
Locally, the event was dubbed "Frankenschock" and it lead
economists to slash growth forecasts for the export-reliant
But Switzerland last year avoided an anticipated recession
and, in a sign of a slight weakening of the franc and
its ability to weather the currency storm, the economy grew by
0.6 percent in the three months to end-June from the previous
This was ahead of even the most optimistic forecast in a
Reuters poll of nine economists and the strongest quarterly
growth rate since the end of 2014.
GDP expanded 2 percent year on year, more than twice as much
as the market had expected.
"Positive contributions to GDP came from foreign trade as
well as government consumption," the State Secretariat for
Economic Affairs (SECO) said in a statement.
Sharply negative Swiss interest rates - three-month rates
are around minus 0.75 percent - and subtle market interventions
by the Swiss National Bank have stabilised the franc at around
1.09 per euro.
This has been a tolerable level for exporters.
Swiss mechanical and electrical engineering companies saw an
18.5 percent increase in new orders in the second quarter,
raising hopes of a recovery in a sector hit by the strong franc.
(Editing by Michael Shields)