ZEW-CS Financial Market Test Switzerland - Economic Expectations Continue to Brighten Up

Economic expectations for Switzerland continued to improve in October 2009. The relevant ZEW-CS Indicator of Economic Sentiment increased by 7.0 points month-on-month, reaching the 65.0 mark. Accordingly, a majority of 67.5 percent of the financial market experts surveyed predict that the economic momentum will improve over the next six months. Only 2.5 percent expect the economy to deteriorate. This is the result of 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 also improved by 7.0 points – albeit still hovering at a low level – and the corresponding balance now stands at minus 55.0 points. The overriding majority of 87.5 percent of survey participants still expect short-term interest rates to hold steady. Inflation expectations edged up just slightly in October, with a 35.9 percent share of the financial market experts anticipating higher prices on a six-month horizon. 59 percent of the respondents forecast no change in terms of inflation.

The focal point of this month’s "special question" is directed on the G-20 summit meeting in Pittsburgh. Regarding the results of the summit meeting, 14.3 percent of the respondents acknowledged that their expectations had been fulfilled, while 54.8 percent expressed a "neutral" view and a total of 30.9 percent were disappointed. Particular interest was directed at targeted reforms of financial institutions as well as financial market regulations. A respective share of 29.6 percent of respondents acknowledged that significant results were realised in these two areas.

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: +41/44/332-9061, E-Mail: fabian.heller@credit-suisse.com