The Swiss government said it was cautiously optimistic for the economic outlook assuming the euro zone debt crisis does not again escalate even as it trimmed its growth forecast for 2013 to 1.3 percent.
"Alongside the dark clouds hanging over the situation, the first signs of light at the end of the tunnel are appearing," economists at the State Secretariat for Economics (SECO) said.
"These first signs allow for cautious optimism and to anticipate a gradual improvement in Switzerland's international economic environment over the next two years."
The SECO stuck to a forecast for 1 percent growth for 2012, but pared its outlook for 2013 to 1.3 percent from the 1.4 percent it predicted in September.
It expects growth to accelerate to 2 percent in 2014 assuming the euro zone debt crisis remains under control and the global economy gradually recovers.
It forecast consumer prices to fall by 0.7 percent this year, up from a prediction of minus 0.5 percent made in September. Prices are seen rising 0.2 percent in 2013 and 2014.
The new government forecasts come ahead of a quarterly monetary policy meeting on Thursday of the central bank, which is expected to reiterate its determination to keep a lid on the safe-haven franc to avert recession and deflation.
The SECO said Swiss exporters were still struggling from the strong franc and sluggish global demand, particularly in the machinery, electrical and metal industries and the tourism sector, although the cap on the franc was helping.
The Swiss National Bank is expected to predict growth of 1 percent for 2013 and confirm its growth forecast for 2012 of 1 percent.
The Swiss economy grew at a faster-than-expected 0.6 percent in the third quarter after a 0.1 percent contraction in the previous three months but is seen struggling again in coming months as demand stays muted in the euro zone.
Unemployment is expected to tick up to 3.3 percent in 2013 and 2014 from 2.9 percent in 2012, the SECO said.
The SECO's predictions are based on the assumption that Swiss interest rates will remain at rock bottom through 2013 and that the franc will fall 3.4 percent on a trade-weighted basis this year and a further 1.4 percent in 2013.