ZEW-CS Financial Market Test Switzerland - Lower Economic Expectations

The ZEW-CS-Indicator of Economic Sentiment for Switzerland declines by 12.9 points, reaching the 40.5 mark in May 2010. 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 indicator for the assessment of the current economic situation in Switzerland also declined, dipping by 8.5 points to the 4.8 level, but still wavering in positive territory for the second consecutive month.

In the wake of the pick-up in the previous month, inflation expectations diminished again in May. But overall, the share of respondents who expect prices to decrease remained rather modest at 9.5 percent (up 5.1 percentage points). With 61.9 percent the majority of financial experts continue to forecast a constant inflation rate.

88.1 percent of questioned analysts predict that interest rate levels will hold steady. Merely 11.9 percent of the survey participants believe that short-term rates will rise on a six-month horizon.

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

Dr. Gunnar Lang (ZEW), Phone: +49 (0)621/1235-372, E-mail: lang@zew.de  

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