Weaker Swiss franc to boost retailers, help growth -economists

ZURICH, Aug 30 (Reuters) - The recent depreciation of the Swiss franc will help spur Switzerland's economy as the weaker currency boosts consumption and makes Swiss retailers more competitive, according to three indicators published on Wednesday.

The franc has lost more than 4 percent against the euro since the start of July and is trading near its weakest level since the Swiss National Bank (SNB) abruptly scrapped a currency cap in January 2015.

Although the Credit Suisse/CFA Society Indicator for investor sentiment fell by 9.7 points in August to 25 points, the view of the current economic situation was still at its highest since August 2014.

"The recent depreciation of the Swiss franc is clearly having a supporting effect," Credit Suisse analysts said. Most respondents in the survey said they did not expect any further depreciation of the franc in the next six months.

Credit Suisse forecasts Swiss GDP will grow by 1.5 percent in 2017 and 1.7 percent next year, up from an estimated 1.3 percent rate in 2016.

A weaker franc makes Swiss products cheaper in the eurozone, the largest Swiss export market. UBS said it expected the franc's devaluation to improve the competitiveness of Swiss retailers, who have been hit for years by consumers crossing the border to shop in Germany and France.

Tourism is also likely to become more competitive in the coming months after the franc's drop versus the euro.

"On the whole the weaker franc could have a slightly positive effect on Swiss consumption growth," UBS said on Wednesday. Its Swiss consumption indicator edged higher to 1.38 points in July from 1.30 points in June. Tourism, which has also been hurt by visitors swapping Swiss resorts for cheaper locations, will also become more competitive in the coming months after the franc's drop versus the euro.

Also on Wednesday, the KOF economic barometer, which points to the development of the Swiss economy in around six months time, fell to 104.1 points in August from an upwardly revised 108.0 points but was still above the long-term average.

"This indicates that in the near future the Swiss economy should continue to grow at above-average rates," the Zurich-based economics institute said.

However, it also cautioned that the recent franc depreciation had yet to alleviate pressure on companies, many of whom remain pessimistic about their competitiveness. (Reporting by John Revill; Editing by Raissa Kasolowsky)

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