Switzerland Country Profile - Economy, Currency, Central Bank, Canadian Dollar, CAD

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Introduction

Switzerland is the 36th largest economy, with a GDP of $388 million in 2006, and a population of 7.5 million people. With its lon-term monetary security, stability, and bank secrecy, Switzerland is a destination for assets that are seeking a "safe haven." The economy is increasingly dependant on foreign investment and money flows. The country's small size and highly skilled labor force make industry and trade the central part of the economy. With its location in the heart of Europe, the Euro-zone is the country's most important trading partner. The economy also currently has a low interest rate (2.75%), which makes the Swiss Franc a funding currency for carry trade.

Go to Economic and Financial Profile

Switzerland's Fundamental Indicators and Chart

Monthly Data for December, 2007

Date	EST	Indicator	Actual	Forecast	Previous
12/3	3:30am	SVME PMI	63.4	59.5	60.7
		For November
12/6	1:45am	Unemployment Rate	2.6%	2.6%	2.6%
		For November.
12/12	5:00am	ZEW Expectations	-29.7		-28.9
		For December.
12/13	3:30am	SNB Interest Rate Statement	2.75%	2.75%	2.75%
		See Statement from the Swiss National Bank The Bank kept rates steady, and projected a growth rate of around 2% for 2008, after growing 2.5% in 2007. It noted that the Swiss economy was in very good shape and that employment and domestic demand was robust. However, upheaval in financial markets may jeopardize growth. The bank see inflation increasing in the first half of 2008 as a result of higher oil prices, but that it would ease in the second half of the year and in 2009.
12/17	3:15am	Industrial Production q/q	0.0%	-2.0%	7.2% 6.7%
		For Q3. Y/Y 10.7%; forecast 8.0%; prv. 10.3% revised from 9.8%
12/18	3:15am	Retail Sales y/y	2.2%	5.1%	7.1%
		For October.
12/20	2:15am	Trade Balance	1.89B	1.44B	1.40B
		For November
12/20	3:15am	Producer and Import Prices	0.3%	0.2%	0.2%
		For November
12/26	12:00am	Holiday: St. Stephen
12/28	5:30am	UBS Consumption Indicator	2.131		2.212
		For November.
12/28	5:30am	Leading Index	1.99	1.98	2.02
		For December. Release from Swiss Institute for Business Cycle Research Underlying economic conditions are still strong although growth has slightly slowed according to the KOF leading index.

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Central Bank Watch - Latest Swiss National Bank Decision

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December
11th, 2008

Actual

Forecast

Revised Form

0.50%

1.00%

N/A

Provided by: Swiss National Bank
Official Release: Statement

From the Release: "The Swiss National Bank (SNB) is lowering the three-month Libor target range by 50 basis
points to 0.0–1.0% with immediate effect. It will continue to provide the Swiss franc money market with a generous and flexible supply of liquidity. It will take all necessary steps to gradually bring the Libor down to the middle of the target range.

The global economic environment has sharply deteriorated over the past few months. Economic activity has declined in both the US and Europe, and has slowed considerably in Asia. The situation on international financial markets has worsened further since September. The Swiss economy will be heavily affected by these developments. The SNB projects that GDP growth will be negative next year, between –0.5% and –1%.

The unfavourable economic outlook and the falling oil price have prompted a radical adjustment of the inflation forecast. Inflation will undergo a substantial decline over the course of next year, and will remain low thereafter. Assuming a constant rate of 0.5% for the three-month Libor, the SNB is now forecasting average annual inflation of 0.9% in 2009 and 0.5% in 2010.

The improvement in the inflation outlook has provided room for manoeuvre which the SNB is decisively using. By further lowering the Libor target range, the SNB aims to reduce the risk of a deterioration in the situation, and thus supporting economic activity."

Go to SWZ Interest Rate Fundamental Indicator Page