Experts anticipate a further deterioration in the economic outlook
Published: Wednesday, Sep 25th 2024, 10:30
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According to financial analysts and economists, the economic situation in Switzerland has deteriorated further. They assessed the outlook for the local economy in September as even slightly worse than a month ago, when the index compiled for the UBS survey slipped into negative territory for the first time in a long time.
The UBS CFA indicator, which summarizes the expectations of financial analysts and economists regarding the economy over the next six months, fell further in September compared to the previous month to -8.8 points. In August, the index slipped into negative territory for the first time since the beginning of the year, falling to -3.4 points.
The September decline is the fourth in a row and reflects the growing pessimism among survey participants regarding the growth prospects of the Swiss economy, according to the report. Expectations have worsened, particularly with regard to economic developments in the USA, the eurozone and China.
Decline in interest rates expected
Interest rate expectations have also fallen. The proportion of analysts who expect interest rates to fall in Switzerland, the eurozone and the US in the short and long term has increased. It should be noted that the survey was conducted at a time when both the ECB and the US Federal Reserve have already lowered their key interest rates. On Thursday (tomorrow) it will be the turn of the Swiss National Bank (SNB).
With regard to the development of the Swiss franc, survey participants were increasingly expecting an appreciation against the euro and the US dollar compared to August. The risk of a depreciation of the euro appears to be slightly higher, as more participants expected the franc to appreciate against the euro than against the dollar, according to the press release.
Despite weaker global growth expectations, participants remain relatively optimistic about share price performance. Over the next six months, more respondents expect share prices to rise than fall in Switzerland, the eurozone and the USA.
Stable long-term prospects
In the long term, i.e. for the next three to five years, the expectations of analysts and economists have hardly changed. In terms of GDP growth, the downside risks have only been raised slightly, they said. The probability that the long-term growth of the Swiss economy will be around 0 to 1 percent annually has increased. Fewer respondents still expect growth of 2 percent or more.
The survey was conducted between September 12 and 19 and 34 analysts from the Swiss financial sector took part.
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