ZEW-CS Financial Market Test Switzerland - Economic expectations diminish marginally

Economic expectations for the next six months for Switzerland edged down slightly again in December. The ZEW-CS-Indicator dipped by 2.4 points to the 54.0 mark. 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). At the same time, the assessment of the prevailing economic picture brightened up a little, with the corresponding indicator climbing by 3.3 points to the minus 42.9 level.

The lion's share (74.0 percent) of financial market experts surveyed continues to anticipate that short-term interest rates will hold steady on a six-month horizon. The balance for interest rate expectations increased marginally in December, reaching the 22.0 threshold. Meanwhile, the balance for inflation expectations declined by 7.4 points and now stands at 32.6. The December survey results reveal that 59.2 percent of respondents expect inflation to rise in the coming six months.

Within the scope of this month's "special question," the financial market experts were asked to convey their forecasts for the coming new year. Regarding expectations for economic growth, the largest proportion (35.4 percent) of survey participants expect positive GDP rates ranging between 0.5 percent and 1.0 percent as the most probable scenario.

The survey process and methodology

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, Fax: -223, E-Mail: dick@zew.de

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