April

After dipping below the long-term average in March, the KOF Economic Barometer rises in April again. The opportunities for parts of the economy due to the recovery from the pandemic are currently dominating the strains from the international environment.

The KOF MPC figure for 14 April 2022 is 0.51. At today’s meeting, the ECB’s Governing Council communicated that initial signs of above-target revisions in long term inflation measures warrant close monitoring.

The German economy is steering through difficult waters and faces the highest inflation rates in decades. In their spring report, the leading German economic research institutes revise their outlook for this year significantly downward. The KOF Swiss Economic Institute is part of the Joint Economic Forecast as a consortium partner of the ifo Institute, Munich. The recovery from the COVID-19 crisis is slowing down as a result of the war in Ukraine, but remains on track.

In March, KOF and the Neue Zürcher Zeitung (NZZ) newspaper surveyed 110 economists at Swiss universities on their assessments of inflation and monetary policy in Switzerland. More than half of these respondents reckon that the key interest rate will be positive in the next five years. An interest-rate move by the SNB is not expected until the ECB has raised its key rate.

The Global Barometers decrease in April, likely reflecting shocks such as the war in Ukraine and the increase in the number of COVID-19 cases in China. The Coincident Barometer is now below the historical mean of 100 points for the first time since February 2021. In addition, the more noticeably drop in the Leading Barometer signals the perspective of a stronger deceleration in world growth for the coming months.