Economic Expectations Continue to Rise

The ZEW-CS Indicator for the economic sentiment in Switzerland has continued its rise in October 2016. Growing by 2.5 points, the index now stands at 5.2 points. The indicator thus continues the slight upward trend already seen in the previous month. The indicator for the current economic situation also recorded an increase, rising by 9.9 points to a current reading of 17.9 points. The ZEW-CS Indicator reflects the expectations of the surveyed financial market experts regarding the economic development in Switzerland on a six-month time horizon. It is calculated monthly by the Centre for European Economic Research (ZEW), Mannheim, in cooperation with Credit Suisse (CS), Zurich.

The majority of the surveyed experts (69.2 per cent) expect the Swiss economy to remain unchanged in the coming six months. The share of respondents who hold this opinion increased by 8.7 percentage points compared to the previous month. The surveyed experts are, however, more optimistic in their expectations regarding the eurozone and the USA. The corresponding indicators both recorded an increase and currently stand at 8.1 and 35.1 points. More than 70 per cent of experts consider the current economic situation in all three economic areas to be “normal”.

According to the current survey, the inflation rate for Switzerland is expected to continue its increase. For the first time since May 2011, more than half of the experts (53.8 per cent) forecast an increase in the inflation rate for the coming six months. Against this backdrop, long-term interest rates in Switzerland are also expected to rise. The respective indicator has increased by 6.4 points to a level of 56.5 points. The survey participants show, however, great pessimism with respect to the Swiss stock market: merely 37.1 per cent of the experts expect the Swiss Market Index (SMI) to grow in the coming six months. This is the lowest share recorded since the survey was begun in 2006.

Detailed Results

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

For more information please contact

Markus Teske (ZEW), Phone +49 (0)621/1235-372, E-mail teske@zew.de

Maxime Botteron (Credit Suisse), Phone +41 44 332 90 61, E-mail maxime.botteron@credit-suisse.com