Swiss economy expected to brighten – indicator turns around
Published: Wednesday, Feb 28th 2024, 10:21
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Financial analysts' assessment of the Swiss economic outlook has turned around. The corresponding index has crossed the zero line and is now in positive territory.
The UBS CFA indicator published by UBS rose by a whopping 29.7 points to 10.2 points in February, according to a statement on Wednesday. This is the first time in two years that the indicator has been in positive territory. The economic optimism of the analysts surveyed has not been this strong since mid-2021, according to the statement.
However, it was emphasized that this development would require confirmation in March before it could be described as a sustainable trend reversal. This is because the current situation has hardly changed.
Meanwhile, the domestic economy should benefit from a recovery in exports - this sub-indicator has also made it into positive territory. This assessment is based on a significantly more positive view of the economy in Europe and the USA.
Divided opinions on SNB policy
However, experts are finding it somewhat more difficult to predict the future steps of the Swiss National Bank (SNB). Opinions are divided. While a good half consider foreign exchange market interventions to be the SNB's preferred instrument to counter an appreciation of the Swiss franc, almost 40 percent think that the SNB would prefer to cut interest rates.
The euro-franc exchange rate is also likely to remain in the range of 0.90 to 1.00 for the majority of investors over the next few months.
For this reason, around 70% of analysts do not expect a short-term interest rate cut as early as March. The probability increases over the course of the year, with 80 percent of respondents expecting a rate cut by December, with a key interest rate of 1.50 percent being the most likely.
The survey took place between February 15 and 21, with 39 analysts taking part.
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