Swiss economic outlook index falls to annual low
Published: Monday, Dec 23rd 2024, 11:20
Updated At: Monday, Dec 23rd 2024, 11:00
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According to financial analysts and economists, the outlook for the Swiss economy deteriorated further in December. However, the majority of the experts surveyed expect a sideways trend.
The UBS CFA indicator, which summarizes the expectations of financial analysts and economists regarding Swiss economic development over the next six months, deteriorated by 7.6 points to -20.0 points in December compared to the previous month, as the major bank announced on Wednesday. The index is now in negative territory for the seventh month in a row and at its lowest level of the year.
However, the situation is not considered to be overly dramatic. According to the press release, around half of those surveyed still expect the economy to remain stable. 14% even expect an improvement, while a third of respondents anticipate the economic outlook to deteriorate.
Around a third also expect an increasing deterioration for the eurozone and the USA, and a fifth for China. However, as more respondents anticipate improvements for the three regions, the international outlook is somewhat more optimistic overall than for Switzerland.
Current situation roughly the same
The assessment of the current economic situation in Germany is roughly the same as in November. Almost 90% of respondents continue to rate the current situation as "normal". Just under 9% think the situation is good and just under 6% think it is bad.
Internationally, assessments vary depending on the region. While almost half of those surveyed consider the situation in the USA to be good, none of those surveyed consider the economy in the eurozone or China to be good at present. In all three regions, the situation is rated as normal to poor.
Inflation expectations are falling
The analysts surveyed raised their short-term inflation expectations in November, according to the report. UBS attributes this to the election of Donald Trump as the new US president. This month, expectations are now back to normal. "The proportion of analysts who expect Swiss inflation to cool rose again to almost 46% in December," it says.
Analysts expect Switzerland's GDP to grow by 1 to 2 percent over the next three to five years with a probability of 50 percent. However, according to the press release, the risks are on the downside. With a probability of 41 percent, growth will be below 1 percent. Only 9 percent of those surveyed expect growth to exceed 2 percent.
The experts are even more unanimous when it comes to the inflation rate. 70 percent expect a rate within the SNB target range of 0 to 2 percent. The probability of an inflation rate above or below these values is below 20% for both scenarios.
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