ZEW-CS Financial Market Test Switzerland - Economic Outlook Almost Unchanged

In April the ZEW-CS-Indicator of Economic Sentiment for Switzerland paints a nearly unchanged picture of the prospects for the Swiss economy on a six month time frame. Economic expectations edged down marginally by 0.4 points to the 53.4 mark. Thus, the ongoing sideways trend hovering at a relatively high level the last few months continues to prevail. This is revealed by the current Financial Market Test Switzerland, carried out monthly by the Centre for European Economic Research (ZEW) in cooperation with Credit Suisse (CS).

The assessment of the current economic situation in Switzerland brightens up distinctly. The corresponding balance improved by 15.9 points and reached the 13.3 threshold – climbing back into positive territory for the first time in 18 months.

Although the share of analysts expecting a rise in inflation increases by 20.5 percentage points, the overriding majority of 62.3 percent of analysts anticipates an unchanged inflation rate in the coming six months.

Regarding the short-term interest rate environment, the lion’s share (68.9 percent) of financial market experts still predicts that rates will hold steady at low levels in the next half-year. Nevertheless, the share of analysts expecting rising interest rates augments by 10.6 percentage points. Thus, the balance for short-term interest rate expectations climbed by 15.7 points to the 31.1 mark.

Sentiment among the financial market analysts toward the Swiss stock market has brightened noticeable. Two thirds of the financial market experts (65 percent) expect the Swiss Market Index (SMI) to gain terrain in a six-month timeframe. On the other hand, one out of five participants sees the SMI stabilising at the present index levels.

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

Lena Jaroszek (ZEW), Phone: +49 (0)621/1235-380, E-mail: jaroszek@zew.de  

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