Economy Expectations for the Swiss economy less optimistic

Financial analysts and economists are less optimistic about the prospects for the Swiss economy than they were a few months ago. In July, a corresponding index fell to its lowest level since January.

The so-called UBS CFA indicator - a monthly survey conducted by UBS on expectations for the next six months - fell by 8.1 points in July compared to the previous month to +9.4 points. However, the fact that the index remains in positive territory indicates a continued moderately optimistic assessment for the local economy, UBS wrote in a press release on Wednesday.

The last time the index was lower than this month 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 temporary high of 18.2 points in May.

According to UBS, the assessment of the current economic situation also became less optimistic in July, but this index also remained in positive territory. The overall picture thus remains relatively optimistic, according to the major bank.

According to the survey, a similar picture emerges for the eurozone, although the assessment of the current situation there is significantly more negative. On the other hand, expectations for the US economy have improved from a low level. Although the assessment of the current situation there has been revised downwards, it still indicates a stronger development than for the Swiss and eurozone economies. This reflects more dynamic growth in the USA compared to Europe.

Consensus for interest rate cuts strengthened

In view of the recent decline in inflationary pressure, the consensus among analysts and economists for interest rate cuts has increased, according to UBS. In the latest survey, the overwhelming majority of respondents expected lower short-term interest rates in Switzerland, the eurozone and the USA over the next six months.

The risk of a weaker Swiss franc against the euro and the US dollar also appears to remain low in this environment. In fact, most survey participants expect either a stable exchange rate or a stronger Swiss franc against both currencies.

The survey was conducted between July 18 and 24 and 32 analysts took part.