Switzerland’s economy expanded a real 0.3% in Q2 compared to the first quarter, mainly because of the ongoing post-pandemic recovery in the services sector and strong consumer spending.

This compared to 0.3% growth in the first three months of the year, or 0.2% when excluding the impact of major sporting events, according to the State Secretariat for Economic Affairs (SECO).

Switzerland’s GDP rose 2.4% year-on-year, and also the same growth adjusted for sporting events. Whereas economists surveyed by Reuters news agency had forecast GDP to increase 0.4% quarter-on-quarter and 3.0% year-on-year.

The government does not see an urgent need to implement measures to soften the blow of soaring energy prices, adding that the economy was performing well, unemployment remained low, and inflation was forecast to decline in 2023.

Consumer price inflation increased by a higher-than-forecast 3.5% last month, the seventh consecutive month it has exceeded the central bank’s 0-2% target band, Reuters reports.

At the beginning of April, most public health restrictions were lifted in Switzerland, boosting the food and services sector, to grow 12.4% during the quarter, SECO stated.

In addition, inbound tourism registered a significant rise in overnight stays, particularly by visitors from the U.S. and Europe. However, the value added by this sector remained 10% under pre-pandemic levels.

Just two service sectors reported a fall in value added in the quarter. This was financial services at -1.5% and trade at -2.1%, the latter predominantly due to food retailing and wholesale trade, the Reuters report adds.

Generally, there was strong growth in domestic demand, together with a 2.1% increase in imports.

In addition, the country’s manufacturing sector fell 0.5% following seven quarters of robust growth, fuelled by the chemical and pharmaceutical industry, which faced a drop in exports. However, other industrial sectors registered modest growth.