Economic expectations on upward trend

ZEW-CS Financial Market Test Switzerland

Mannheim, (PresseBox) - The economic expectations for Switzerland on a six-month horizon have brightened up once again in May. This reveals the Financial Market Test Switzerland, carried out by the Centre for European Economic Research (ZEW) in cooperation with Credit Suisse. The ZEW-CS indicator increased in May by 23.8 points to the minus 3.9 threshold, but is still hovering just barely in negative territory. Although the indicator for the assessment of the current economic situation declined by 2.6 points to the minus 66.0 mark, signs of stabilization are increasingly discernable. Inflation expectations recorded a more noticeable increase in May compared with the previous month's survey. The corresponding indicator gained 35.6 points to the minus 7.9 level. At the same time, expectations regarding short-term interest rates rose, too, with 15.7 percent of the survey participants predicting advancing rates on a six-month timeframe. Still, the overriding majority of respondents (80.4 percent) continue to expect interest rates to hold steady at current levels.

Within the scope of this month's "special question," participants in the Financial Market Test Switzerland were asked to convey their assessments regarding the effectiveness of monetary and fiscal policies amid the prevailing economic environment. The responses show that the analysts view the strategy of "quantitative easing" as an effective instrument for press release stimulating lending activity. However, 78 percent of the respondents foresee a risk that the monetary-policy measures could result in rising inflation rates (see link below).

Detailed results

More detailed results - including survey participants' assessment of developments in other countries - can be found in this month's edition of the "Switzerland Financial market report" (please note that the URL is case sensitive):
http://www.credit-suisse.com/news/doc/media_releases/zew_report_05_09_en.pdf

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