Publications and Subscriptions Monitor Switzerland Q2 2017
Political “noise” does not impress companies.
In the latest issue of "Monitor Switzerland", Credit Suisse economists explore the question of why forecasts made following political events often prove too pessimistic. They show that widespread political uncertainty – as measured on the basis of media reports – is not a good forecasting tool for the economy. In fact, companies are fairly good at weighing up the likelihood of political decisions being implemented. Furthermore, an analysis by the Credit Suisse economists shows that in the recent past the Swiss National Bank (SNB) has on each occasion responded to political uncertainty with increased intervention in the foreign exchange markets, thereby lessening the impact on the real economy. The Credit Suisse economists are leaving their 2017 growth forecast for the Swiss economy unchanged at 1.5%. For 2018 they expect growth to accelerate slightly to 1.7%. Inflation is likely to be 0.5% in both years.