ZEW-CS Financial Market Test Switzerland - Economic Expectations Edge Down Slightly

The ZEW-CS-Indicator of Economic Sentiment for Switzerland declines by 3.7 points, reaching the 52.5 mark in February. However, the indicator still continues to hover at a relatively high level. 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 paints a more pessimistic picture in February versus the previous month’s survey. In the wake of the strong surge in January, the corresponding indicator retreated by 8.6 points and is now hovering at the minus 35.7 level. A growing share of 83.3 percent of the analysts (up 8.3 percentage points) expects short-term interest rates to hold steady at the current level. Meanwhile the balance for inflation expectations declined this month. Although 31 percent of the analysts (down 17 percentage points) still predict that inflation rates will continue to climb, 69 percent (up 20 percentage points) foresee an unchanged inflation outlook on a six-month horizon.

Sentiment among the financial market analysts toward the Swiss stock market has dampened slightly. 14.6 percent (up 4.2 percentage points) expect that the Swiss Market Index (SMI) will lose ground within the next six month.

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 44 332 90 61, E-mail: fabian.heller@credit-suisse.com