June

The KOF Economic Barometer increases significantly in June. After the sharp declines of the last three months, the barometer is thus rising again for the first time. However, with a value comparable to April, the barometer is still considerably below its long-term average. As a result, the prospects of the Swiss economy are very subdued, but brightening up somewhat compared to the previous months.

Due to the coronavirus crisis, a pronounced weakness in investment is becoming increasingly apparent, making it difficult to return to strong economic activity. The ETH researchers Hans Gersbach, Heiner Mikosch and Jan-Egbert Sturm therefore propose to extent the COVID-19 lending programme, focusing on investment and gradually reducing government guarantees. This can accelerate the economic recovery without placing a heavy burden on the public finances.

A special survey shows that a large proportion of Swiss companies are expecting a decline in total sales in 2020 due to the corona crisis. However, the KOF expects the economy in Switzerland to recover more quickly than in neighbouring countries. This year, GDP will fall by 5.1 per cent. The KOF is thus leaving its May forecast for 2020 virtually unchanged.

Following a succession of decreases that drove the Coincident and Leading Global Economic Barometers down to their lowest level in history last month, the indicators are showing the first signs of recuperation since the beginning of the Covid-19 pandemic. There remains a great uncertainty, but the modest movement of June may signal that the world economy is entering a phase of gradual recovery.  

The KOF MPC figure for 4 June 2020 is -0.74. Given a substantial downward revision of the inflation outlook, the ECB decided to adjust the parameters of the pandemic emergency purchase programme.