March

The Swiss government has taken initial measures to cushion the economic consequences of the coronavirus pandemic. However, companies will still have to bear costs such as rent, leases or interest payments. These capital costs are not covered by the current package. They should be partially reimbursed to companies through existing channels. This is what ETH professors Hans Gersbach and Jan-Egbert Sturm are proposing.

The reading of the KOF Economic Barometer dropped drastically in March and is now with 92.9 well below its long-term average. Accordingly, the Swiss economy can be expected to see a marked decline in growth rates in the near future. This plunge of the Barometer reflects the first economic consequences of the accelerated spread of the Coronavirus.

The battle to contain the coronavirus pandemic is posing significant challenges for the economy. Economic forecasts are subject to huge uncertainty. KOF is therefore presenting three scenarios that show how business activity could evolve going forward. The baseline scenario sees the Swiss economy sliding into recession in the first half of 2020. Under the mild scenario the disruption to business activity would abate more quickly, while in the negative scenario it would be much more severe.

The KOF MPC figure for 12 March 2020 is 0.21. As a response to the coronavirus (COVID-19) shock, the ECB decided on a comprehensive package of monetary policy measures.

The two Global Economic Barometers show how much the coronavirus epidemic has already impacted the prospects for the global economy. Both the Leading Barometer for global economic development and the Coincident Barometer are declining sharply. These are the lowest values for both Barometers designed by KOF and FGV since 2009.