ZEW-CS Financial Market Test Switzerland - Economic expectations edge up slightly

The November Financial Market Test Switzerland, carried out by the Centre for European Economic Research (ZEW) in cooperation with Credit Suisse, reveals that economic prospects have improved slightly in November, but continue to hover at a very low level. The ZEW-CS indicator of economic expectations edged up by 2.6 points to the minus 88.5 mark.

On the other hand, the assessment of the current economic situation deteriorated, with the corresponding indicator dropping by 20.2 points to the minus 13.5 threshold. The outlook for inflation has continued to brighten up in November. 90.4 percent of the experts forecast retreating inflation rates in the coming six months. Dampening of the economic picture and the expected decline in inflation probably had an impact on the analysts’ assessment regarding monetary policy, too. In fact, the relevant indicator for short-term interest rates plunged by 39.3 points to the minus 90.4 level.

Within the scope of this month’s "special question," the financial market experts were asked to convey their assessments regarding the impact of the financial crisis on Switzerland and possible monetary and economic policy reactions. The majority of analysts (35 percent) expect significant effects on the Swiss economy emanating from the financial market crisis. However, the respondents acknowledged that the Swiss National Bank (SNB) had merely limited to moderate possibilities to tackle the crisis. Roughly 38 percent of survey participants advocate government measures for stimulating the real economy. In this regard, the experts favour investments in infrastructure and tax cuts, while most respondents oppose subsidies.

Detailed results

More detailed results - including survey participants' assessment of developments in other countries - can be found in this month's edition of the "Financial Market Report Switzerland".

For further information please contact

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

Marcel Thieliant (CS), Phone: +41 44 332 0969, E-mail: marcel.thieliant@credit-suisse.com