ZEW-CS Financial Market Test Switzerland - Economic Expectations Diminish at High Level

Economic expectations for Switzerland diminished somewhat in November. In the wake of the strong surge recorded in previous months, the relevant ZEW-CS-Indicator lost ground by 8.6 points, but continued to hover at a high level of 56.4 points. This reveals the current Financial Market Test Switzerland, carried out monthly by the Centre for European Economic Research (ZEW) in cooperation with Credit Suisse (CS).

Furthermore, the assessment of the current economic situation once again turned out to be less pessimistic in November. The corresponding indicator increased by 8.8 points to minus 46.2 points. The lion’s share of the financial market experts surveyed (75.0 percent) still expect short-term interest rates to remain unchanged in the coming months. Inflation expectations are on the rise in November. Although 55.0 percent of the survey participants still anticipate that inflation will hold steady, 42.5 percent believe that inflation rates will climb on a six-month horizon.

The focal point of this month’s "special question," is directed at China’s impact on international equilibrium. For example, the survey participants were asked about potential problems of the Chinese Yuan to compete with other currencies, such as the Euro or the US Dollar. In this context, a majority of the responses pointed at the political stability and the openness of China as a main obstacle.

The survey process and methodology

The ZEW has conducted a similar monthly survey for Germany since 1991. The aim of the Swiss survey is to develop indicators both for Switzerland's general economic climate as well as for the Swiss services sector.

Specifically, survey participants are asked to give their medium-term expectations for important international financial markets as regards the development of the economy, the inflation rate, short- and longer-term interest rates, equity prices and exchange rates. In addition, the financial experts are also asked to assess the earnings situation of companies in the following Swiss services sectors: banks, insurance, consumer/retail, telecoms and services as a whole.

The results represent the net difference between the percentage of positive and negative responses. Figures in parentheses show the changes for each indicator compared to the previous month.

For further information please contact

Christian David Dick (ZEW), Phone: +49/621/1235-305, E-mail: dick@zew.de

Fabian Heller (Credit Suisse), Phone: +41/44/3329061, E-mail: fabian.heller@credit-suisse.com