- SNB Quarterly Bulletin: GDP is likely to contract by around 6% this year; this would be the strongest decline since oil crisis in 1970s
Market news
24 June 2020
SNB Quarterly Bulletin: GDP is likely to contract by around 6% this year; this would be the strongest decline since oil crisis in 1970s
- In light of highly valued Swiss franc, SNB remains willing to intervene more strongly in the foreign exchange market
- SNB’s expansionary monetary policy helps stabilise economic activity and price developments in Switzerland
- In current situation, inflation and growth forecasts are subject to unusually high uncertainty
- Inflation rate seen to be negative (–0.7%) this year, and is likely to rise in 2021, but still be slightly negative (–0.2%), before returning to positive territory in 2022 (0.2%)
- Coronavirus pandemic has pushed global economy into sharp recession
- Decline in global GDP is likely to be even more pronounced in Q2
- In its baseline scenario for global economy, SNB anticipates that further waves of infection will be successfully prevented
- Global production capacity will probably be underutilised for some time yet, and inflation is likely to remain modest in most countries
- Baseline scenario is subject to high level of uncertainty on upside and downside alike
- Swiss economy is also in sharp recession
- Although downturn set in only in March, GDP was already 2.6% lower in Q1 than in the previous quarter; decline in GDP is likely to be even stronger in Q2
- SNB anticipates that there will be only partial recovery for the time being, and GDP will not return quickly to its pre-crisis level
- Economic revival in Q2 of the year is likely to be reflected in clearly positive growth in 2021
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