SWISS 1988 INFLATION SEEN AT TWO PCT - INSTITUTE

  Swiss inflation is likely to rise in 1987
  and 1988 because of inflationary tendencies in the domestic
  economy, the Centre for Economic Research of the Federal
  Institute of Technology said in its spring review.
      It forecast a rise in consumer prices of two pct in 1988
  compared with 1.3 pct in 1987. Low import prices in 1986 helped
  to keep annual inflation down to 0.8 pct.
      The centre said that in general the outlook for the Swiss
  economy in 1987 and 1988 remained favourable, despite the more
  difficult international economic climate facing export
  industry.
      The centre repeated its previous forecast that growth in
  Swiss domestic product would slow to 2.2 pct in 1987 from 2.5
  pct in 1986. It revised its forecast for 1988 GDP growth to 1.7
  pct from 1.6 pct in its last autumn review.
      Domestic demand will continue to replace exports as the
  motor of economic growth. Private consumption will grow by
  three pct in 1987 and two pct in 1988 against 3.75 pct in 1986.
      Growth in goods exports will slow to 1.75 pct in 1987 from
  2.1 pct in 1986 but pick up slightly to 2.5 pct in 1988. All
  three figures are well below the Swiss average for recent
  years. In 1985, for example, exports increased by 9.1 pct.
      The centre said the strength of the Swiss franc, which has
  firmed sharply in recent months, would continue to put pressure
  on Swiss exporters.
      It forecast that imports of goods would grow by a more
  modest 4.5 pct in 1987 and 3.25 pct in 1988 than in 1986, when
  import prices fell substantially and imports rose by 8.2 pct.
      Industrial production will grow by 1.6 pct in 1987 and 1.2
  pct in 1988 compared with 4.2 pct in 1986.
  

