2017.06.2306:38:00UTC+00KOF Downgrades Swiss 2017 GDP Forecast

Switzerland's economy is forecast to grow at a slightly slower than previously projected pace in 2017, the KOF Economic Institute said in its Summer Forecast, released on Friday.

The think tank forecast economic growth of 1.3 percent instead of 1.5 percent projected in March. The downward revision reflects weaker growth in the first quarter.

Nonetheless, the institute said the Swiss economy is gaining momentum.

For the coming year, KOF expects a growth rate of 2.1 percent in largely unchanged economic conditions.

The think tank observed that the companies most affected by the Swiss franc appreciation have largely adjusted to the new framework conditions. KOF forecasts an exchange rate of CHF 1.09/EUR in the forecasting period.

KOF expects exports to grow by 2.9 percent this year and 3.3 percent next year and imports to climb 2.2 percent in 2017 and 4.1 percent in 2018.

The inflation forecasts for both 2017 and 2018 were left unrevised. The institute projected 0.3 percent inflation each for this year and next.

The SNB will not consider tightening its monetary policy before the European Central Bank embarks on a more restrictive policy, the KOF said.

The think tank does not anticipate an increase in unemployment. The ILO jobless rate is forecast to be 4.9 percent this year and 4.8 percent in 2018.