The 0% growth in gross domestic product in the April to June period, adjusted for income from sporting events, was down from a 0.9% increase in the first three months of the year, and below the 0.1% growth rate expected in a Reuters poll.

Manufacturing was the main reason for the slowdown, with a 2.9% contraction in output, as the country's strong chemical and pharmaceuticals industry posted a decline.

"The challenging international environment is weighing on the cyclically sensitive industrial sectors such as mechanical engineering and metal construction, resulting in a second-quarter decline in value added for the rest of industry," said the State Secretariat for Economic Affairs (SECO).

The downturn was also reflected in a broad-based decline in goods exports across various countries and categories, SECO added.

Companies were also more cautious, with investment in equipment falling 3.7% from the previous quarter, with lower spending on IT, research and development and vehicles.

"Switzerland cannot decouple itself from the weak economic development in neighbouring European countries," said VP Bank economist Thomas Gitzel.

"As a small, open economy, Switzerland is far too dependent on the wealth and woe of other countries," he said, adding he expected Swiss economic growth to remain around zero for the rest of 2023.

Still, Swiss private consumption remained robust in the second quarter, rising by 0.4%, with more spending on healthcare, food and accommodation.

Compared with a year earlier, the Swiss economy grew by 1.1% in the second quarter, SECO said.

The Swiss government said in June it expects the country's economy to grow by 1.1% this year, followed by a 1.5% increase in 2024.