New Economic Survey by the Centre for European Economic Research in Cooperation with Credit Suisse - The results of the First Survey Indicate a Robust Economic Situation in Switzerland

The Centre for European Economic Research (ZEW) in Mannheim, in cooperation with Credit Suisse (CS), has for the first time carried out a financial market test, a survey among financial market experts, for Switzerland. The analysis shows that the economic forecasts of the participants appear very positive. The current economic situation is for the most part also considered good. The respondents expect an increase in the inflation rate as well as in short- and longer-term interest rates. The detailed results can be obtained from the "Switzerland Financial Market Report", which will be published on a monthly basis.

The economic forecasts of the financial market test survey participants indicate a very positive outlook. At the moment, the economic situation is considered good by 75.8 percent of the participants. Most of the respondents are also optimistic in their economic expectations for the coming six months. A further improvement in the economy is expected by 37.1 percent, whereas 48.4 percent expect no change, and only 14.5 percent expect the situation to worsen. The balance of the positive and negative judgments for this indicator therefore lies at 22.6. The expectations relating to the inflation rate may have been influenced by the high oil price. On this matter, 62.9 percent of the participants expected an increase, but only 4.8 percent expected a decline, leading to the balance for this indicator of 58.1.

The forecasts for short- and longer-term interest rates indicate further increases. Accordingly, 96.7 percent of respondents are expecting a rise in short-term interest rates, and 77.4 percent are expecting an increase in longer-term interest rates in the next six months. As part of each survey, the participants are requested to answer a special question. In the first financial market test, the financial market experts were asked to provide an estimate of Switzerland's real GDP growth over the whole of 2006. Approximately 44 percent of the respondents expect a growth rate in the real Swiss GDP of between 2.0 and 2.5 percent.

The Survey Process and Methodology

A similar monthly survey has been conducted by ZEW 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. The survey also records the interest rate expectations for Switzerland compared to the euro zone. The percentage shares for each response category are presented. The balances result from the difference between the positive and negative percentage shares.

The analysis of the next financial market test will also show the changes for each indicator compared to the previous month. In particular, the financial experts will also be 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. The financial market experts will provide their answers in the form of only qualitative estimates on the likely direction of any movement. That is, they will only state, whether, in their opinion, longer-term interest rates, for example, will increase (+), decrease (-) or remain approximately the same (=) in the next six months. The financial markets assessed are Switzerland, Germany, the euro zone, the US, Japan and the United Kingdom. In addition, the financial experts will be requested to give an insight into the earnings situation of companies in the following Swiss services sectors: banks, insurance, consumer/retail, telecoms, and services as a whole.

Contact

Dr. Michael Schröder, Phone: +49/621/1235-140, E-mail: schroeder@zew.de

Thomas Herrmann (Credit Suisse), Phone: +41/44/333-5062, E-mail: thomas.herrmann@credit-suisse.com