Switzerland cuts economic growth forecast

The Swiss government has cut its 2012 growth forecast, blaming the economy's exposure to the eurozone crisis. The expected growth rate was lowered to 0.5% from 0.9%. The country is not expected to suffer a recession, provided the eurozone crisis does not worsen. But recession and deflation - falling prices - remain a concern. They were the main reasons cited by the Swiss National Bank for its interventions to weaken the franc since the summer. "Assuming that a further escalation of the debt crisis in the eurozone can be avoided, the economic weakness in Switzerland should be limited and of relative short duration," said the State Secretariat for Economics. Prior to its currency interventions, the Swiss franc - which is seen by investors as a haven from the eurozone crisis - had risen sharply in value. That has hurt Swiss exporters, who find themselves priced out of international markets. There has been speculation that the Swiss National Bank may now intervene to weaken the Swiss franc further. In September, it set a floor to the exchange rate of 1.2 Swiss francs to the euro, which it has successfully defended since.