No. 160, March

Inflation rates have risen significantly over the past year. In the United States in particular, inflation is increasingly becoming a problem to which the Federal Reserve (Fed) must respond. Inflation has also risen sharply in the euro area. In Switzerland, the situation is still somewhat less serious.

KOF economist Heiner Mikosch, Head of the International Business Cycle Section, talks about the economic dangers for Europe and Switzerland posed by Russia’s attack on Ukraine.

The latest KOF Business Situation Indicator for the Swiss private sector fell very slightly in February (see G 12). Companies remain virtually unchanged in their confidence about business over the coming six months. Uncertainty about business going forward is also decreasing. The Swiss economy is currently performing well.

Many European countries have introduced controls on foreign investment in recent years. Up to 60 per cent of foreign investment is now subject to controls. The Swiss federal administration is working on the consultation draft for these new investment restrictions.

The investment outlook for Swiss companies this year is encouraging. According to the findings of the semi-annual KOF Investment Survey, firms intend to increase their fixed investment by a nominal 3.4 per cent in 2022. In the manufacturing sector in particular, this investment will help to expand their technical production capacity.