December

The KOF Economic Barometer reaches its previous year’s closing level in December. The barometer, which tended to fall during the year 2019, has thus fully recovered. However, the barometer is still below its long-term average. The outlook for the Swiss economy at the beginning of 2020 is brightening somewhat, but remains subdued.

The KOF MPC figure for 12 December 2019 is 0.25. Given a subdued inflation outlook, the ECB reit-erated the need for a highly accommodative monetary policy stance for a prolonged period of time.

The slowdown in global economic activity and the weak level of growth in the euro area – especially in German industry – are acting as a drag on the Swiss economy. At the same time the international risks have abated somewhat. However, today’s general election in the United Kingdom could fuel further uncertainty. KOF continues to expect GDP growth of 0.9 per cent for 2019 and has slightly lowered its forecasts for 2020 and 2021 to 1.8 per cent and 1.4 per cent respectively.

The situation of young people on the labour market has clearly improved between 2016 and 2017. According to the latest KOF Youth Labour Market Index, Switzerland reaches the highest index score across Europe. Denmark drops to the second rank, but still shows a highly satisfactory situation on the youth labour market. With respect to the previous year, large improvements stem from the Eastern European countries, especially Slovenia and the Czech Republic.