The continued strength of the Swiss francagainst the dollar will largely deprive Swiss exporters of the
benefits of the upturn in the world economy, a quarterly study
by the Economics Department said.
    It said the export industry would scarcely get a boost from
the upturn in the economies of the Organization for Economic
Cooperation and Development (OECD), and predicted declines in
new orders for highly export-orientated firms.
    However, domestic demand, which stagnated in the last
quarter of 1986, would resume its growth, fuelled by higher
real incomes and buoyant consumer sentiment, it said.
    The study, which was drawn up by the department's
Commission for Economic Questions, said industrial production
would scarcely increase, with most firms apparently happy with
current numbers of workers.
    However, an increase in labour demand in the service sector
should help push up total employment, it said.
    The Commission also predicted an increase in inflation from
current low levels.
 REUTER
