ZEW-CS Financial Market Test Switzerland - Economic Expectations Decline

The ZEW-CS-Indicator of Economic Sentiment for Switzerland declines by 15.3 points in July and is now hovering just slightly in positive territory at the 2.2 mark. After a stable phase since September 2009, the Indicator has now deteriorated considerably for the third consecutive month. 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).

In contrast, the indicator for the assessment of the current economic situation brightens up in July. The respective indicator improves this month by 4.7 points, climbing to the 22.2 level.

Inflation expectations increased somewhat again in July. But the majority (75.5 percent) of financial experts surveyed still predict that inflation rates will hold steady in the coming six months.

Interest rate expectations also edged up somewhat in July. The share of respondents who forecast that rates will rise grew by 9.4 percentage points to 24.4 percent. However, most of the analysts (73.4 percent) continue to foresee no change on the interest rate front 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, 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