ZURICH, SWITZERLAND – The Swiss National Bank (SNB) has lowered its forecast for economic growth from 1.5 percent in June to 1.0 percent, citing a number of factors. It also says it will continue to keep the Swiss franc exchange rate cap at CHF1.20/euro.
There is no threat of inflation in the foreseeable future, with the SNB expecting ” inflation rate of –0.6 percent for 2012, 0.2 percent for 2013, and 0.4 percent for 2014.
The Swiss franc has not depreciated “as expected. The forecast continues to project that the Swiss franc will weaken over the forecast horizon.”
The SNB says downside risks to the Swiss economy will stay high in the near term. “The global economy remains vulnerable. Growth prospects are being dampened by the euro area crisis, on the one hand, and the uncertainty surrounding forthcoming fiscal policy decisions in the US, on the other. The situation on the financial markets is also fragile. In addition, the continuing strong momentum on Swiss residential mortgage and real estate markets poses risks for financial stability over the medium term.”