October

The KOF Economic Barometer remains virtually unchanged in October. After repeated weakenings from a historically high level in the summer of this year, the Barometer has stabilised for the time being at 110.7 points. It is thus once again well above its long-term average. The prospects for the Swiss economy until the end of 2021 remain positive, given that the containment of the virus continues.

The KOF MPC figure for 28 October 2021 is 0.19. At today’s meeting, the ECB’s Governing Council confirmed the need for an accommodative monetary policy stance.

The gradual recovery of the tourism sector – also among European tourists – started in late summer. However, domestic travellers remain the mainstay of the tourism industry, while overseas markets are recovering only very slowly. KOF’s in-depth analysis reveals that the para-hotel sector on the whole has come through the coronavirus crisis better than the hotel sector. KOF expects its tourism forecasts to gradually return to normal over the coming winter and summer seasons.

The Corona pandemic still shapes the economic situation in Germany. The German economy will reach normal capacity utilisation in the course of 2022. In their autumn report, the leading economic research institutes – amongst them the ifo Institute in cooperation with the KOF Swiss Economic Institute – forecast that Gross Domestic Product (GDP) will rise by 2.4% in 2021 and by 4.8% in 2022.

In October, the Global Economic Barometers maintain the weakening tendency that started in July, reflecting the slowdown in World economic growth in the second half of 2021. The more intense fall of the Leading Barometer suggests a possible intensification of this tendency in the next three to six months.

The Swiss economy is performing well, but its rate of growth will have returned to normal by the end of 2023. Gross domestic product (GDP) will increase by 3.2 per cent in 2021 and by 3.6 per cent in 2022. Output is likely to have returned to its pre-crisis growth path by 2023.