Retail sales in Switzerland increased 1.2% in January after rising at an annual pace of 3.6% in the previous month, and the outlook for private-spending remains bleak as the government forecasts the economy to face its worst economic downturn since 1975. Meanwhile, the breakdown of the report showed that demands for electronic goods rose 9.8%, while sales of healthcare products increased 6.5% however, discretionary spending on personal goods plunged another 12.1% after falling 20.0% in the previous month, and was followed by an 8.1% drop in cultural goods. As the economy faces a deepening recession, households are likely to cut back on spending as the labor market deteriorates, which is likely to weigh on the exchange rate as the outlook for growth and inflation falter.
