ZURICH, Feb 26 (Reuters) - The Swiss economy is expected to shrink in the first quarter of 2021, before rebounding later, after posting its weakest annual performance in more than 40 years during pandemic-ridden 2020, the government said on Friday. Swiss GDP shrank by 2.9% last year, its worst result since a 6.7% drop in 1975 in the aftermath of oil price shocks, the State Secretariat for Economic Affairs (SECO) said. The economy posted a 0.3% rise in output during the fourth quarter, slowing from a 7.6% improvement in the previous three months, as the government introduced new restrictions to combat a rise in coronavirus cases. SECO now expects Swiss GDP to turn negative in the first quarter - with a downturn of 1.5% to 2 %- as the closure of shops and other restrictions hits consumer spending. Still, the downturn is not expected to derail the recovery, SECO economist Ronald Indergand said, with GDP increasing in the following quarters as the recently announced relaxation measures come into effect. “We are not going to see a crash like in 2020, but are certainly going to see a sharp reduction of GDP during the first quarter,” Indergand told Reuters. “But if everything goes according to plan with the reopening, and there isn’t a third wave of the virus that endangers the capacity of the health care sector, we don’t expect a further round of harsh restrictions. Then, there will be big plus in the second quarter.” Quarter-on-quarter GDP is expected to increase in the third and fourth quarter as well, Indergand said, with SECO expecting Swiss output to reach 2019 levels by the end of 2021. The rebound will also be helped by catch-up spending, as consumers and companies resume consumption after having held back on investments, he said. “We are going to see some catch-up spending, which we saw last year after the restrictions were lifted. The shops are closed but the goods are still there, and many people will have more money to spend.” (Reporting by John Revill Editing by Mark Heinrich)