Economic expectations improve

The Financial Market Test Switzerland, carried out by the Centre for European Economic Research (ZEW) in cooperation with Credit Suisse, reflects in April a less pessimistic assessment of the economic outlook for Switzerland on a six-month horizon. The ZEW-CS indicator of economic expectations increased by 29.4 points to the minus 27.7 mark. At the same time, however, the indicator for the assessment of the current economic situation declined by 8.9 points to the minus 66.0 level.

Although inflation expectations edged up somewhat in April, 52.2 percent of the financial market experts surveyed still forecast retreating inflation rates in the coming six months. Expectations for interest rates remained nearly unchanged, with the overriding majority (80.9 percent) of analysts predicting that rates will hold steady at current levels.

Within the scope of this month's "special question", the participants in the Financial Market Test Switzerland were asked to convey their assessment of the trend on the real estate markets. A large proportion of respondents anticipate that the disposition in lending activity toward private investors will remain constant. On the other hand, half of the experts expect sentiment toward lending activity for institutional investors to diminish. In addition, the survey participants foresee deterioration of the potential for real estate returns, particularly in the office property sector (see link below).

The survey process and methodology The ZEW has conducted a similar monthly survey for Germany since 1991. The aim of the Swiss survey is to develop indicators both for Switzerland's general economic climate as well as for the Swiss services sector.

The results represent the net difference between the percentage of positive and negative responses. Figures in parentheses show the changes for each indicator compared to the previous month.