The recent survey conducted by UBS and CFA Society Switzerland indicates that financial analysts are increasingly pessimistic about the Swiss economy. The economic outlook index has dropped to -12.4 points in November, marking a decline of 4.7 points from October. This decline represents the sixth consecutive month of decline and is the lowest reading since January. Analysts attribute this trend to increasing concerns about the economic landscape, which could have implications for investment strategies and market behavior.
According to the survey, only 18.8 percent of participants foresee an improvement in the economic situation over the next six months. In contrast, 31.2 percent predict a worsening scenario, while half of the respondents believe the situation will remain unchanged. This shift in outlook is particularly notable as the proportion of pessimists has risen by 4.3 points since October, while both optimists and those expecting stability have seen declines. This change in sentiment highlights the challenges facing the Swiss economy.
Inflation remains a critical concern for analysts, with 25.0 percent of respondents anticipating an increase in inflation rates in Switzerland. Conversely, 31.2 percent expect a decline, and 43.8 percent foresee stability in inflation levels. The outlook for interest rates appears more optimistic in the short term, with 80.0 percent of analysts predicting a decline. However, in the long term, the largest share of respondents, at 46.7 percent, expect no change in interest rates.
The Swiss stock market index (SMI) is also under scrutiny, with 46.7 percent of analysts expecting a rise in the index over the next six months. Meanwhile, 36.7 percent anticipate stable values, and 16.7 percent predict a contraction. On the currency front, a significant majority of analysts, 58.6 percent, expect the Swiss franc to strengthen against the euro.
The employment landscape is another area of concern, with 46.7 percent of respondents predicting an increase in unemployment rates. In contrast, 53.3 percent expect stagnation in joblessness, while none foresee a decline.
The survey, conducted between November 14 and 20, reflects a significant shift in the sentiment of financial analysts regarding the Swiss economy. The insights gathered from this survey will be instrumental in shaping investment strategies and understanding the evolving economic landscape.