September

The KOF economic barometer rose in September for the fourth time in a row after a historic drop in spring this year. A comparable value of the barometer can last be observed at the end of the financial crisis in 2009/2010. At present, the economy is taking a V-shaped course, so that a recovery of the Swiss economy can be expected for the time being. However, a second wave of COVID-19 cases could lead to a sharp revision of this assessment.

Economic growth in the euro area will level off in the fourth quarter, following a massive recovery in the third quarter. This is the consensus of three research institutes: ifo in Munich, Istat in Rome and KOF. However, reliable prognoses are difficult to make in the current environment because nobody knows how infection rates will develop, when a vaccine will become available, and what impact economic policy will have.

The KOF MPC figure for 10 September 2020 is -0.21. At today’s meeting, the ECB has reconfirmed that ample monetary stimulus is necessary to support the economic recovery and to safeguard medium-term price stability.

The  Global Economic Barometers maintain their upward tendencies that began in May, after historic lows in April. The Coincident Barometer has reduced its upward pace and still reflects economic activity levels well below those before the Covid-19 pandemic. The Leading Barometer, on the other hand, reaches its highest level since 2010, signalling continued optimism regarding upcoming world GDP developments. Given the high levels of uncertainty, this should be interpreted with caution.

Companies are looking to increase their productivity by investing in digital technologies. However, this can only happen if firms are innovative, adapt their organisational processes and invest in IT security. A new study shows that Swiss companies generally appear to underestimate the potential of digitalisation.