Swiss economic growth accelerated unexpectedly in the first quarter of 2012, buoyed by strong domestic consumption, the latest figures from the State Secretariat For Economic Affairs showed Thursday. The rate of growth was the fastest since the third quarter of 2010.

The gross domestic product expanded 0.7 percent quarter-on-quarter in the first quarter, faster than the revised 0.5 growth recorded in the fourth quarter.

The fourth quarter growth was upwardly revised from the 0.1 percent increase reported initially. Economists had forecast the economy to stagnate in the first three months of 2012.

The SECO report noted that private and public consumption delivered a positive boost to growth, whilst gross fixed capital formation and external trade made a negative contribution to GDP.

Consumer spending rose 0.6 percent quarter-on-quarter, the same pace as in the previous quarter. Government consumption grew 2 percent, recovering from the 0.2 percent decline in the December quarter. On the other hand, gross fixed investment slipped 1.5 percent.

Recession in many euro area economies, including Spain and Italy, and tight austerity measures across the single currency bloc have considerably damped demand from the region. Switzerland's exports of goods and services dropped 0.4 percent from the previous three-month period, while imports jumped 2.4 percent.

On Sunday, Swiss National Bank President Thomas Jordan told SonntagsZeitung newspaper that the bank is readying an emergency plan, that includes capital controls, for dealing with a possible collapse of the euro though the bank believes such a scenario is highly unlikely.

Swiss policymakers imposed a ceiling of 1.20 versus euro in September last year to stem excessive gains in the currency following the worsening of the Eurozone debt crisis.

SECO said that on the production side, almost all sectors made positive contributions while the industrial sector showed some degree of weakness, SECO said.

Year-on-year, GDP rose 2 percent, faster than the 0.7 percent expansion expected by economists. At the same time, the fourth quarter growth rate was revised up to 2 percent from the previously reported 1.3 percent.

Switzerland's KOF economic institute said Wednesday that its economic barometer rose for a fourth consecutive month in May, suggesting that the year-on-year growth of the economy is gaining momentum.

In March, SECO upwardly revised its 2012 growth forecast for the economy to 0.8 percent from the 0.5 percent projected in December, while stating that exports may grow much faster than estimated in December.

At the same time, the growth estimate for 2013 was cut down marginally to 1.8 percent from 1.9 percent.

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