March

In March 2018, the KOF Economic Barometer fell by 2.4 points to a new reading of 106.0. Notwithstanding this decline, the present position is still on a level clearly above its long-term average. This indicates that in the near future the Swiss economy should continue to grow at rates above average.

The Swiss economy is currently on an upward trajectory. This year it will achieve a relatively high GDP growth rate of 2.5%, and KOF is forecasting fairly robust growth of 1.8% for 2019. However, some of this increase is attributable to license fees received from sporting events, which have little to do with the actual performance of the Swiss economy. The labour market is doing well, with unemployment falling slightly. Inflation is gradually moving into positive territory.

Robust economic growth of 0.6 percent can be expected in the first and second quarters of 2018, according to the ifo Institute (Munich), KOF (Zurich) and Istat (Rome). Growth will slow down marginally to 0.5 percent in the third quarter. The key drivers are investments, which will benefit from low interest rates, and rising capacity utilisation rates.

The KOF MPC figure for 8 March 2018 is -0.05. The ECB confirmed its confidence that inflation rates will converge towards the ECB’s inflation aim.