The Swiss economy is bouncing back to buoyancy. Various indicators point to this development. The brisk performance of the manufacturing sector, a surge in exports have indicated that 2006 will turn out to be a very good year for the Swiss economy. A survey of the Swiss corporate sector performance by UBS, the country's leading bank shows that industrial activity picked up sharply in the first quarter of 2006 and is set to continue unabated in the second quarter of the year.

Switzerland's leading banks have revised upwards their predictions for the country's annual gross domestic product (GDP), reckoning on healthy economic growth. UBS has recently raised its growth forecast from 2.3 to 3.0 per cent soon after Credit Suisse hiked its GDP prediction from 2.1 to 2.8 per cent.
The International Monetary Fund (IMF) has also said that "the Swiss economy is showing some spark" and forecast growth in 2006 of more than 2.0 per cent.
UBS said a "surprisingly" strong first quarter boded well. "It is promising that economic activity is not only robust but also broadly based. Most economic indicators suggest that the prospects for the current year remain good." Switzerland's largest bank predicted growth would slow down to 1.4 per cent in 2007, up from the 1.3 per cent previously forecast. Credit Suisse has also revised its forecast as a result of the unexpectedly strong growth at the start of the year.
The bank said the average unemployment rate would drop from 3.8 per cent last year to 3.2 per cent this year and to three per cent in 2007. The IMF said in its annual report that "unemployment has started to recede and despite rising oil prices, inflation remains under control and the current account is running a large surplus". Consumer price inflation is just over 1.0 per cent.
The IMF statement said the recovery presented the Swiss with an opportunity to advance reforms to further boost growth. It added that short-term economic risks facing Switzerland appeared generally contained, and it credited the government with being "on track to eliminate its small structural deficit by 2007".
The IMF praised the Swiss authorities for their "prudent macroeconomic management, sound monetary and fiscal policy frameworks, and flexible labour markets". But the Washington-based institution warned that continued growth in the medium-term would only be possible if the country "addressed the fiscal pressures from an ageing population".
It also called on the government to liberalize further "sheltered sectors, including reducing red tape and state regulations, lowering non-tariff barriers to trade, and reducing the very high levels of protection and subsidization in the agricultural sector".