No. 122, October

Having changed very little in the preceding month, the KOF Business Situation Indicator for the Swiss Private Economy dropped slightly in September (see G 13). Although the indicator is no longer moving upward, it remains very close to its previous high level. The Swiss economy is still booming. However, it is currently not receiving any further boosts.

Swiss investment activities have continued at a high level for a long time now and KOF expects a further rise in the coming year. Nevertheless, there are signs that the end of the investment cycle is imminent.

The Swiss labour market is following a positive trend. According to the KOF forecast, the unemployment rate will remain low and will even decline slightly. The impact of the new job registration requirement is as yet unclear.

The FED is in the process of pushing interest up further and reducing its balance sheet. In the Eurozone, the ECB has also taken a further step towards abandoning its ultra loose monetary policy. This is the environment in which the Swiss National Bank is currently operating.

The Swiss economy is booming. Gross domestic product (GDP) for this year is set to rise by an impressive 2.9 per cent. International economic activity is providing a positive stimulus, and the domestic economy is boosting business activity as well. Unemployment is also set to fall as a result of the strong economy. KOF expects the rate of growth to slow slightly to 1.7 per cent next year before GDP growth will likely rebound to 2.1 per cent in 2020.