July

The KOF Economic Barometer only slightly moved in July. Compared to its June value, it decreased by 0.2 to 101.1 points. The current Barometer value still stands slightly above the long-term average of 100 points; it thus indicates a slightly above-average economic development in Switzerland in the coming months.

The KOF MPC figure for 26 July 2018 is 0.53. The ECB confirmed its confidence that the sustained convergence of inflation towards the inflation aim will continue in the period ahead and will be maintained even after a gradual winding-down of net asset purchases.

While rationalisation was the main investment motive for Swiss companies after the suspension of the minimum exchange rate in 2015, it has come to play a very minor role in this year’s investment decisions. Thanks to the favourable economic trend, companies predominantly plan to invest in capacity expansion. According to the current KOF Investment Survey, investments will go up 8% this year.

The upturn in the euro area will continue this year, albeit at a slower pace than in 2017. The risks to the economy have grown, according to the three institutes ifo (Munich), KOF (Zurich) and Istat (Rome).