National economy Expectations for Swiss economy more pessimistic in August
Financial analysts and economists are more negative about the outlook for the Swiss economy than they were a few months ago. In August, a corresponding index slipped back into negative territory for the first time since January.
28.08.2024, 10:32
SDA
The so-called UBS CFA indicator - a monthly survey conducted by UBS on expectations for the next six months - fell by 12.8 points to -3.4 points in August compared to the previous month. The last time the index was in negative territory was in January 2024. At that time, however, it was very negative at -19.5 points and then rose sharply in the following months to a provisional high of 18.2 points in May.
According to the authors, the fact that it is now back in negative territory shows that the analysts surveyed have a more negative view of the Swiss economy's growth prospects for the next six months than before. According to the press release, more than a quarter of analysts now even expect growth to slow down.
However, the experts are not only more negative for Switzerland, but also for other important economies. The economic outlook for the USA in particular is rated as worse, with 40% of participants expecting a deterioration for the world's largest economy.
Consensus for interest rate cuts further strengthened
Due to the easing inflationary pressure in the eurozone and the USA, the consensus for interest rate cuts has increased further, according to the survey. The vast majority of respondents expect lower short-term interest rates in the next six months, both in Switzerland, the eurozone and the USA. The percentage of analysts who expect lower short-term interest rates has increased for each of the three economies compared to the July survey.
The probability that the Swiss National Bank (SNB) will lower the key interest rate by at least 0.25 percentage points from the current 1.25 percent in September is around 70 percent, according to the press release. In the long term, respondents also believe that a further interest rate cut is possible. By the second quarter of 2025, the probability of an SNB key interest rate below 1.00 percent is just under 50 percent for those surveyed.
The majority of respondents expect the Swiss franc exchange rate to remain stable against the euro and the US dollar. However, the proportion of analysts who expect the franc to depreciate has increased slightly. The conviction that the fair value of the euro-franc exchange rate is between 0.9 and 1.0 is shared by 71% more analysts than in the previous month (61%).
The survey was conducted between August 15 and 20 and 30 analysts from the Swiss financial sector took part.
