ZURICH: The Swiss government cut its growth forecast for next year to 0.5 percent from a previous 0.9 percent due to a worsening European economy but said it does not fear a big downturn so long as the clouds over the euro zone do not darken further.
Citing deflation and recession risks, the Swiss National Bank capped the safe-haven franc at 1.20 per euro on Sept. 6. The SNB holds its next policy review on Thursday, and some analysts have speculated the SNB could announce a shift in the cap to weaken the franc further as signs mount that the economy is losing steam.
"Assuming that a further escalation of the debt crisis in the euro zone can be avoided, the economic weakness in Switzerland should be limited and of relative short duration," the State Secretariat for Economics (SECO) said in a statement on Tuesday.
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