​Swiss economic outlook index falls to annual low 

The outlook for the Swiss economy deteriorated somewhat in December. (symbolic image)
Keystone
According to financial analysts and economists, the outlook for the Swiss economy deteriorated further in December. However, the majority of the experts surveyed expect a sideways trend.The UBS CFA indicator, which summarizes the expectations of financial analysts and economists for the Swiss economy over the next six months, deteriorated by 7.6 points to -20.0 points in December compared to the previous month, as the major bank announced on Wednesday. The index is now in negative territory for the seventh month in a row and at its lowest level of the year.However, the situation is not considered to be overly dramatic. According to the report, around half of those surveyed still expect the economy to remain stable. 14% even expect the situation to improve, while a third of respondents anticipate the economic outlook to deteriorate.Around a third also anticipate an increasing deterioration for the eurozone and the USA, and a fifth for China. However, as more respondents expect improvements for the three regions, the international outlook is slightly more optimistic overall than for Switzerland.Current situation roughly the sameThe assessment of the current economic situation in this country is roughly the same as in November. Almost 90% of respondents continue to rate the current situation as “normal”. Just under 9 percent think the situation is good and just under 6 percent think it is bad.Internationally, the assessments differ depending on the region. While almost half of those surveyed consider the situation in the USA to be good, none of those surveyed consider the economy in the eurozone or China to be good at present. In all three regions, the situation is rated as normal to poor.Inflation expectations are fallingIn November, the analysts surveyed raised their short-term inflation expectations, according to the report. UBS attributes this to the election of Donald Trump as the new US president. This month, expectations are now back to normal. “The proportion of analysts who expect Swiss inflation to cool down rose again in December to almost 46%,” it says.Analysts expect a 50 percent probability of GDP growth of 1 to 2 percent for Switzerland over the next three to five years, as before. However, according to the press release, the risks are on the downside. With a probability of 41 percent, growth will be below 1 percent. Only 9 percent of those surveyed expect growth to exceed 2 percent.The experts are even more divided when it comes to the inflation rate. 70 percent expect a rate within the SNB target range of 0 to 2 percent. The probability of an inflation rate above or below these values is below 20 percent for both scenarios.