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According to economists, the Swiss economy is likely to experience the second krona wave soon. This could also put the Swiss franc under slightly stronger upward pressure again.
Experts interviewed monthly by Credit Suisse together with the CFA Society Institute on Economic Development are looking much more cautiously into the future given the rising corona numbers in October compared to the previous month, as announced Wednesday by Credit Suisse.
The CS-CFA indicator, which measures the assessment of economists for the next six months, fell accordingly from 23.9 to 2.3 points. It is only just above the limit of contraction. The bleak outlook is also reflected in the GDP forecast for next year.
The forecasts for 2021 are lower
After the strong economic recovery during the summer months, many analysts have revised upwards the growth forecasts for 2020 as a whole. For 2021, however, they have lowered their expectations. The average value of the expected growth is now 1.6% compared to 3% in the July survey, as the message says. One in five survey respondents even expect GDP to decline further next year.
Geographically, the economists interviewed are even more pessimistic about the euro zone and the United States. Here the survey values have even fallen into negative territory, which means that experts from these regions are expecting a decline. For China alone, the outlook is clearly positive with +21 points.
In line with the sentiment barometer, export expectations also declined, according to the announcement. Analysts were concerned not only about the increase in the number of cases in Switzerland, but also about the economic situation among the trading partners.
In this context, the forecasts for the labor market fluctuate at a high level. More than 70 percent of survey respondents (and thus slightly fewer than in September) expect the unemployment rate to rise during the winter months.
The upside pressure is increasing
The rising risks of the second wave are also reflected in foreign exchange expectations. In any case, the short relaxation phase of the summer is over for Franconia. Most analysts surveyed expect the Swiss franc to appreciate again against the euro or at least to remain constant.
This is even clearer in the case of the “greenback”: 60 per cent of analysts attribute to the franc a potential for appreciation against the dollar.
For the occasion, participants in the ongoing poll were asked about next week’s US presidential election. According to this, 70 percent of survey respondents expect a limited result and, consequently, political unrest in the country. But only a small minority of 15% expect a substantial impact on global financial markets.
The survey was carried out between 15 and 22 October. 43 analysts participated.
now / uh
Zurich (awp)
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