The economic expectations for Switzerland have improved again in August. This reveals the current Financial Market Test for Switzerland which is carried out by the Centre for European Economic Research (ZEW) in cooperation with Credit Suisse (CS). After its decline in the previous month, the ZEW–CS indicator of economic expectations has continued to follow its uptrend which started at the beginning of 2009, climbing in August from the neutral level of 0.0 to the 18.6 mark.
On the other hand, the indicator for the assessment of the current economic situation was less positive, deteriorating by 8.9 points to a reading of minus 79.1.
Inflation expectations have changed just slightly since the July survey, with roughly two-thirds of the respondents now expecting the inflation rate to continue holding steady at the current level.
In this month’s "special question," the financial market experts were asked about the factors to which the weakening momentum in lending activity is attributable. The answers show that several factors are seen as responsible. In each case, more than half of the respondents expressed agreement with the three respective possible factors: lack of demand, lack of supply as well as deteriorating consumer credit ratings and stricter equity capital regulations for banks. On the other hand, 26.3 percent of the survey participants do not consider the lack of supply as a factor of origin in this context.
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.
Fabian Heller (Credit Suisse), Phone: +41/44/332-9061, E-Mail:firstname.lastname@example.org
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