Consumers see inflation as stronger and expect it to increase in next 12 months
BERN, SWITZERLAND – Swiss consumer confidence is rising, with the quarterly index of Seco, the State Secretariat for Economic Affairs showing a marked increase in two key areas. The survey carried out at the end of April shows that “consumer expectations regarding the development of the overall economic situation reached -2 points in April (compared with -29 in January). There was also an improvement in the expectations concerning unemployment (+49 in April com-pared with +71 in January),” according to a statement from Seco.
The two areas that remain virtually unchanged, however, are assessments of the future development of consumers’ personal financial situations (+0 in April compared with +1 point in January) and “the assessment of their future savings opportunities (+20 compared with +22 points in January)”.
A number of changes are taking place in the way the survey is carried out, starting with a change in the research institute doing the research, but it will also cover an additional two to three weeks and will include 1,200 rather than 1,100 households. A key change is that Italian speakers from Ticino are now being inclluded; in the past the surveys were run only in French- and German-speaking Switzerland.
GENEVA / ZURICH, SWITZERLAND – Airline Swiss announced Tuesday 27 March that it will be increasing long haul flight fares 2 April, by CHF10-30 in economy class and CHF50-100 in business, for flights from Switzerland.
Changes in the market account for the price hikes, says the company, which notes that first class fares and special offers are not affected.
EasyJet confirmed Monday that it will begin a trial of allocating seats on five lines, possibly including Geneva, in April. The plan was announced last December, but losses in the airline industry have put some plans on hold.
GENEVA, SWITZERLAND – Geneva’s financial sector remains a significant part of the canton’s economy, responsible for 20 percent of the gross domestic product (GDP), but in 2007 that figure was 25 percent, and 2011 shows new slippage. Ocstat, the canton’s statistical office, Monday 19 March said that while financial business rose by 0.9 percent in the first quarter of 2011, it then fell each quarter, down by 1.6 percent, 0.4 percent and 0.7 percent.
Overall, the Geneva economy showed growth in 2011, albeit slow and mainly thanks to be good first quarter, with the fourth quarter up 0.3 percent compared to previous quarters’ increases of 0.4 and 0.2 percent.
Ocstat published provisional figures 16 March. The final figures will be released in September 2012.
GENEVA, SWITZERLAND – Japan has announced its first trade deficit since 1980, Y2.49tn ($32bn), with Prime Minister Yoshihiko Noda saying it will take until 2014 for a turn-around. Analysts, according to the financial press, are gloomier about Japan’s short- to mid-term prospects for avoiding a current account surplus. The savings rate in the country has been falling, fuel costs have risen sharply in the past year and the trade balance has been hurt as well by a combination of the broader impact of the major earthquake at the start of 2011, floods in Thailand which have pushed down exports, and a trade deficit with China that is five times higher than in 2010.
Japan has historically had large trade surpluses.
Links to other sites: Bloomberg, Financial Times, RTE
GENEVA, SWITZERLAND – The impact of Europe’s economic woes hit home in Spain Sunday, with the right winning strongly in the country’s general election. Mariano Rajoy conservative People’s party won with a 16-percent lead over outgoing Prime Minister Zapatero’s Socialists, who lost one-third of their seats.
Spain’s unemployment stands at 23 percent and the economy, says the Guardian, is one of Europe’s “shakiest”. But Rajoy’s election leaves many questions, points out Le Monde in France, with few clues about his programme, who will work with him and more.
BERN, SWITZERLAND – Consumer prices fell slightly, 0.1 percent, in October, Swiss federal figures published 7 November show, but the bad news is that unemployment, which has held steady despite the economic crises in surrounding countries, is climbing.
Swiss unemployment rose from 2.8 percent in September to 2.9 percent in October. Partial unemployment, for which the latest figures are August, showed a 13.8 percent increase, with 300 additional workers seeing their hours cut, but with the number of companies unchanged.
GENEVA, SWITZERLAND – Irish voters are heading for the polls Thursday 27 October to elect a new president, choosing from a record seven candidates. Top of the issues is the woeful state of the Irish economy, with one of the worst recessions in recent history. The past history of the candidates has played a role in the bitter and often dirty campaign for today’s elections. The 3.1 million people eligible to vote will also be dedingon two referendums, one about reducing judicial pay and the other about broadening the scope of investigative committees.
The seven-year post is seen as largely ceremonial, but the president does wield influence and has limited absolute power in some areas.
Links to other sites: Irish Times, RTE
GENEVA, SWITZERLAND – The UN High Commissioner for Refugees, UNHCR, will be recommending to states that they end Rwandan refugee status as of 31 December, with the change taking effect in July 2012.
The move is one of the clearest signs to date of the normalization of Rwanda’s political and economic situation. A 1990 civil war was followed by the 1994 genocide that killed between half a million and a million people (estimates vary)). Only some 10,000 of the 115,000 refugees from Rwanda have returned home, despite a growing economy with coffee, tea and tourism in particular booming.
The UNHCR made the announcement jointly with the Rwanda government 7 October, with the two noting that they have “agreed that a meeting of all relevant States and other actors will be organized in December this year with a view to achieving increased voluntary repatriation and securing greater opportunities for local integration or alternative legal status for Rwandan refugees in countries of asylum. The cessation of refugee status is one of the components of this strategy.”
Swiss producer and import prices drop - View of the Basel port by Martin Ruetschi/Photopress
NEUCHATEL, SWITZERLAND – The Swiss producer and import prices fell sharply in August 2011 says a report published 14 September by the Federal Statistics Office, FSO.
The index for August slid 1.2% from the previous month as a result of a weak economy worldwide, lower prices for paper, oil, gas and chemical products, and the strengthening of the Swiss franc.
The current index is set at 98.5 points.
Prices for domestic products declined 0.8%, import prices fell 2%.
Compared to August 2010, the price index of the total supply of domestic and imported products decreased by 1.9%.
Following the release of the data, the Swiss franc extended losses against the US dollar gaining 0.39% to trade at 0.8838.
The Swiss Federal Council spent the day out of the office, instead holding their official meeting at the Chateau Mercier in Sierre
Update 20:00 BERN, SWITZERLAND – The Swiss franc rose yet again Wednesday 17 August, turning around after a dip at the start of the week against most major currencies. The shift comes in the wake of a Franco-German meeting that left investors lukewarm and efforts by the Swiss National Bank to reduce its strength that appear to have been viewed as not too onerous.
The currency developments were accompanied by the news late Wednesday that Switzerland could well have a 2011 budget surplus, rather than the deficit earlier predicted.
The franc finished the day in Switzerland at CHF.78 for the dollar, from a dollar high of CHF.80. The euro was trading at CHF1.1394 from a euro high of CHF1.1554 (figures, Reuters).
Tougher mortgage rules part of Swiss franc fallout
An undesirable side effect of the measures taken to rein in the Swiss franc is that banks are loaning out money for mortgages too easily, with very low interest rates, says the Federal Council. Strict rules about mortgage deposits are not being observed as much as they should, argues the council, so starting in January 2012 banks will face tougher restrictions and will be required to ask for larger deposits. The announcement was one of several linked to news of the federal surplus.
Central bank expands supply of liquidity to Swiss franc money market
The SNB announced early in the day that it was taking three steps, effective immediately, to “expand again significantly the supply of liquidity to the Swiss franc money market. In so doing, it is increasing the downward pressure on money market interest rates with a view to further weakening the Swiss franc exchange rate”:
- it aims to expand banks’ sight deposits at the SNB, from CHF 120 billion to CHF 200 billion
- to achieve this new target level as quickly as possible, it will continue to repurchase outstanding SNB bill
- for the same reason it will continue to employ foreign exchange swaps.
Budget surplus won’t have an impact on 2012 budget
The Swiss Federal Council, after a special summer session at the Chateau Mercier in Sierre Wednesday, announced that the 2011 budget is likely to have a CHF2.5 billion surplus instead of the CHF600 million deficit predicted earlier. The turnaround is due mainly to higher than forecast revenues, with companies’ profits higher than predicted in 2010 as the economic recovery proved to be stronger than expected. Government spending was also lower than predicted.
The new figures are based on accounts at the end of June 2011.
The 2012 budget was approved in May, at which point it was already clear that revenues for 2010 would be higher than expected, so the Federal Council says the new, mid-year predictions, will have no impact on the 2012 budget.
CHF2 billion industrial aid programme set up to avoid sending jobs abroad, reduce price fixing
The cabinet announced Wednesday it is setting aside CHF2 billion to rapidly boost industry, which is suffering from the role of the Swiss franc as a safe haven for foreign investors. The fund, the Federal Council acknowledges, is “large” and will be used to “strengthen industries that have been hit hard by the negative foreign exchange situation and to prevent jobs from going abroad”, including tourism.
The council will also seek a rapid change in the laws covering competition that would touch a number of price-fixing areas and it plans to provide Comco, the competition commission, with four additional posts for two years, to better enforce existing legislation.
Federal Council press release, details of the CHF2 billion industrial aid fund (Fre)
Swiss cabinet called in Hildebrand, central bank president, for special briefing
BERN, SWITZERLAND – The Swiss Federal Council says it is closely watching the record high Swiss franc situation, studying options and is ready to act if necessary, but it cautions against knee-jerk reactions that provide only short-term solutions. It issued a cautious statement Tuesday morning 9 August about the extraordinary meeting held by the governing group of seven Monday to review options in the face of market turmoil and investors pushing up the Swiss franc as a safe haven.
The group threw its support behind SNB (Swiss National Bank) President Philipp Hildebrand’s intervention in money markets last week and his promise to do more if the franc remains too high.
“It believes, as does the SNB, that the Swiss franc is clearly overvalued and that an energetic intervention is needed on the monetary policy front”, the Council said in the statement.
“We believe today that economic activity will slow down substantially in the quarters to come. The Federal Council is closely watching developments. It estimates that Switzerland’s position remains stronger than that of most of its neighbours but it is nevertheless aware of the need to watch the situation closely.”
China, Russia and India free trade deals are a focus
The Council noted a number of steps that have been taken since the start of 2011 to cushion the economy and business, noting in particular that it is keen to complete negotiations for free trade agreements with China, India and Russia before the end of 2012.
BERN, SWITZERLAND – The high franc and world economic news are taking their toll on Swiss consumers’ sentiment, an official quarterly Swiss survey shows: “the confidence index declined to -17 in July (after -1 in April),” reports Bern. “In particular expectations for future economic development and future unemployment levels were far more negative than in April.”
Expectations for economic development were down 22 points out of 100 and expectations for rising unemployment were up 16 points, while expectations for family household’s personal financial situations slipped by 2 points. The only positive note was the possibility of setting aside money in the current environment, more positively appreciated in July than in April.
The Swiss franc remained at near-record highs against the dollar (CHF.75), the euro (CHF1.07) and the pound sterling (CHF1.23) Tuesday 9 August, after stepping down from record highs during the night.
Swiss franc (photo, ©2011 Ellen Wallace)
Update 09:30 ZURICH, SWITZERLAND – The Swiss National Bank reacted Wednesday morning 3 August to the rapid rise of the Swiss franc, calling it “massively overvalued” and saying it will “very significantly increase the supply of liquidity to the Swiss franc money market over the next few days.”
“This current strength of the Swiss franc is threatening the development of the economy and increasing the downside risks to price stability in Switzerland. The SNB will not tolerate a continual tightening of monetary conditions and is therefore taking measures against the strong Swiss franc,” the central bank noted in a statement.
Specifically, the bank’s actions include:
- aiming for a three-month Libor as close to zero as possible, narrowing the target range for the three-month Libor from 0.00–0.75% to 0.00–0.25%
- very significantly increase the supply of liquidity to the Swiss franc money market over the next few days: expand banks’ sight deposits at the SNB from currently around CHF30 billion to CHF80 billion.
- with immediate effect, the SNB will no longer renew repos and SNB Bills that fall due and will repurchase outstanding SNB Bills, until the desired level of sight deposits has been reached.
The SNB says it is watching markets closely and will intervene again if necessary, noting that the combination of a worsening global economic outlook and sharp appreciation of the Swiss franc during the last few weeks has resulted in a substantial deterioration of the outlook for the Swiss economy.
NEUCHATEL, SWITZERLAND – Swiss retail sales were healthy in June, up 7.1 percent compared to the previous month and up 7.4 percent compared to a year earlier. Figures released 2 August by the federal statistics office in Neuchatel show that retail trade was up across the board.
Retail sales, Switzerland, turnover with seasonal adjustments in red (chart, Swiss Federal Statistical Office)
GENEVA, SWITZERLAND – Figures issued Thursday 19 May by the Japanese government show that after struggling in the post-earthquake weeks, the country’s economy has now slipped officially into recession, often defined by economists as two quarters running of falling GDP. Real GDP (gross domestic product) was down 0.9 percent for the first quarter, or 3.7 percent at an annualized rate, the cabinet office announced, with factory output slowing significantly.
AP reports that the quarterly figures include only 20 days that followed the earthquake in March. But it points out that with 24,000 people dead or missing, and the world’s most costly natural disaster estimated to have cost $300 billion in damages, the impact of the earthquake on the economy was massive.
The Financial Times notes that “the decline follows a contraction in the final quarter of last year and will probably strengthen calls for greater government spending on relief and reconstruction, despite widespread worries about the impact of the extra borrowing required on an already highly indebted state.”
Though “Sub-Saharan Africa’s recovery from the crisis-induced slowdown is well underway, with growth in most countries now back fairly close to the high levels of the mid 2000s”, siginificant infrastructural limitations as well as rising food and fuel prices threaten smooth economic recovery and growth in the region.
Links to other sites: allAfrica, The Citizen (Dar es Salaam)
Switzerland: IMF checks economic winds in 2011
Bern, Switzerland (GenevaLunch) - The IMF (International Monetary Fund) in its annual country report on Switzerland says the economy is broad-based in the aftermath of the global economic crisis. It is forecasting 2.1 percent growth for 2011 and 1.8 percent in 2012, when it expects exports to fall.
“Domestic demand is benefiting from low interest rates, increased employment and continuing immigration. In spite of the strength of the Swiss franc, exports have grown due to increased global demand.” Geopolitical tensions could have a negative impact and are the biggest risk factor, agreed the IMF team, who visited Switzerland from 18 to 28 March. Tensions in the euro zone could also spark difficulties.
The SNB (Swiss National Bank) could consider tightening monetary policy, the IMF group says, with rebuilding its capital a priority. The central bank’s capital was drained during the crisis, as were those of many governments. Future dividends to the cantons and the Confederation should be made subject to the ability of the SNB to replenish its capital.
The heaviest criticism was reserved for the banking regulatory system, which needs further work, according to the IMF. The Federal Department of Finance will create a working group to follow up one issue: the mandates of the SNB and Finma, the financial supervisory body, should be clarified, according to the IMF.
Additional capital requirements provided for in the Federal Council’s “too big to fail” consultation draft will be instrumental in limiting the risks posed by systemically important banks. Consequently, the IMF experts warn against allowing overly generous “rebate” possibilities. Switzerland’s new capital requirements are among the most stringent in the world, going well beyond bank capital requirements that are part of the new, global BIS (Bank for International Settlements) Basel agreement.
In the mortgage market, the IMF sees a certain degree of easing in financial institutions’ lending standards, says Bern. “The interest-rate sensitivity of banks’ balance sheets has increased due to the tendency towards fixed-rate mortgages with long maturities” and the IMF is in favour of “implementing more conservative affordability standards”, which could be bad news for new home owner wannabes.
The IMF has given its support to several ongoing improvements:
- “The neutral fiscal position to be expected over the next few years is considered appropriate” says Bern’s statement on the IMF visit
- the measures to restructure disability insurance must continue
- the IMF welcomes the ongoing efforts to strengthen financial planning and statistics.
Ugandans went to the polls Friday 18 February and, unlike their fellow Africans in rebelling Arab nations, it appears that the votes for the country’s president and parliamentary candidates were mostly cast peacefully. It is widely predicted that incumbant President Yoweri Museveni will win, but there have been some accusations of voting irregularities.
Museveni has been in power for 25 years, which makes him an easy target for those who worry about dictators, but his rule has been so much less violent than that of a predecessor, Idi Amin, that critics’ voices are relatively muted.
Uganda’s average annual growth rate of 8 percent for fiscal years 2001-2008, according to World Bank figures, has been the best in East Africa, and now Uganda looks set to hit the oil jackpot, all of which are reportedly seen by Ugandans as a reason to vote for more of the same.
Links to other sites: Business Week, Fox News opinion, UG Pulse,
Vevey's lake fork art, near the Alimentarium food museum, popular with tourists
Bern, Switzerland (GenevaLunch) – The number of foreign visitors was up 5.1 percent in November 2010 compared to a year earlier, figures published Friday 14 January show.
Foreign visitors accounted for more than half of the 1.8 million overnight stays in hotels, and stayed an additional 41,000 nights in November, despite the steep climb of the Swiss franc, which has appreciated 13 percent against the euro in the past 12 months.
Swiss business and finance leaders are meeting with government and central bank officials in Bern Friday to discuss the implications of the strong franc and strategies for dealing with it.
The Swiss economy has remained “robust”, as one analyst said at year-end, despite the franc’s strength. Exports were also up in November, the government reported 21 December.
Overnight hotel stays by foreigners rose 2.1 percent for the first 11 months of 2010. Asia and the Middle East brought the largest percentage increases: China (without Hong Kong) was up 40 percent, 8,500 nights, in November while India was up 14 percent, 1,900 nights. Gulf countries were up 12 percent, 2,000 nights.
But even euro and dollar nation visitors rose:
Germany, up 3.2 percent, 7,000 more nights
Russia, up 19 percent – 4,500
France, 3.9 percent – 3,100
USA, up 5.3 percent – 4,300 and North America as a whole up up 7.1 percent.
Italy showed the largest drop, down 5.8 percent, some 3,700 nights.
Neuchatel, Switzerland (GenevaLunch) – Swiss inflation for the month of December was flat compared to the preceding month and rounds off the year with a rate of +0.7 percent, according to figures released by the Swiss Federal Statistics Office (FSO). The consumer price index at the end of 2010 stood at 104.2 (December 2005 = 100). The cost of transportation, education, leisure and culture, and hotels and restaurants increased slightly according to the FSO.
Despite the strong Swiss franc imported goods increased 1 percent in 2010.
The FSO also announced the beginning of a new series for the inflation index, which will now begin December 2010 = 100. The new series will incorporate changes such as the housing rental index, an updated “family basket” of goods, and new means to capture improvements in the quality of goods being measured, as well as the nature and frequency of consumer surveys.
Estonia 1 January became the 17th nation to adopt the euro as its currency, with Prime Minister Andrus Ansip taking cash out of an automatic teller machine as the changeover took place. It is the only former Soviet Union country that is part of the zone. Its GDP of 14 billion euros makes it the second smallest euro partner, with only Malta having a smaller economy, among the group, according to Bloomberg.
More money to spend - Photopress/Gaetan Bally
Neuchatel, Switzerland (GenevaLunch) - Salaries in Switzerland grew 2.1% in 2009 while real salary growth reached 2.6% due to a negative inflation of -0.5%, says the Swiss Federal Statistical Office, OFS.
This is the highest real salary growth in a decade. From 2000 to 2008 real salaries grew only between -0.4% and 1.5%.
The 2.1% increase in nominal salaries means the Swiss had a little more money to spend since the price increase for goods in 2009 was estimated at 1.4%.
Postal services and telecommunications saw the largest salary increases with 3.1%, while the smallest increase was registered in the personal services area with 1.3%.
The OFS announced in June that in 2008 one in three workers in Switzerland made between CHF4,000 and CHF8,000 per month, with an average gross salary of CHF6,046 per month.
Dollar loses strength vs the Swiss franc
(GenevaLunch) – The US dollar has sunk to a record low against the Swiss franc on the prospect that the US Federal Reserve will ease monetary policies (more money-printing). The dollar also fell to a 15-year low against the Japanese yen while the Australian dollar surged to a 27-year high against the US dollar.
On 7 October the dollar fell as low as 0.9555 franc on EBS.
The continued rise of the Swiss franc could have a damping effect on the performance of the Swiss economy as cited in June by the federal government’s Expert Group on Economic Forecasts: “Within the context of the present exchange rate, future export growth is likely to be slightly decelerated but not stalled.”
It defines a damping effect as an exchange-rate-related decline in price competitiveness.
According to the group, “the greatest economic risk for Switzerland is still likely to be a suddenly excessive appreciation of the franc in relation to the euro (flight to the franc as a safe haven).”
Zurich, Switzerland (GenevaLunch) - The Swiss franc is at near parity with the US dollar following stronger than expected GDP results. The euro, which in the past week has sunk to record lows against the franc, was boosted by remarks by European Central Bank President Jean-Claude Trichet to the effect he does not expect a double-dip recession. Bloomberg reported Thursday 2 September that “the currency climbed 0.5 percent to $1.0111 as of 10:50 in Zurich. It appreciated 0.4 percent to 1.2964 per euro, after strengthening to a record high of 1.2852 on August 31.”
Links to other sites: Bloomberg, Financial Times (31 August), XE exchange rate site
China now appears likely to be the world’s second largest economy in 2010, after the US, based on GDP (gross domestic product); it had already overtaken Japan for quarterly growth by the end of 2009. It has held the number two position since 1968, when it took it over from West Germany. The latest quarterly figures for Japan show slow growth for the second quarter, only 0.4 percent (annualized, with seasonal adjustments), while China continues to grow steadily. Official figures for both will be available only at the end of 2010, but the Financial Times reports that figures released 16 August are well below the 2.3 percent growth rate expected by most analysts. The economies are difficult to compare for a number of reasons, and China is generally considered to under-report its growth, but the latest figures confirm the trend that China’s influence is outstripping that of Japan.
Links to other sites: New York Times, Guardian, UK, Xinhua
WHO says over 50% population obese in 10 Pacific islands, causing host of health problems
Adolescents learn good eating habits at a youth centre in Port Vila, Vanuatu (photo: Unicef /Giacomo Pirozzi)
Geneva, Switzerland (GenevaLunch.com) – Three Pacific Island regions, Melanesia, Micronesia and Polynesia are home to 10 islands whose populations are suffering from growing health problems, with obesity at the root of the problem. Imported foods are the main culprit, says the World Health Organization (WHO) in Geneva.
WHO surveys show that in at least 10 Pacific island countries, more than 50 percent of the population is overweight.
Obesity prevalence ranges from more than 30% in Fiji to a “staggering 80 percent among women in American Samoa”, a territory of the USA, says the organization.
Overweight is defined as having a body mass index (BMI) equal to or more than 25, and obesity as a BMI equal to or more than 30.
“Promotion of traditional foods has fallen by the wayside. They are unable to compete with the glamour and flashiness of imported foods,” says Dr Temo K Waqanivalu, the WHO’s technical officer for nutrition and physical activity for the South Pacific.
Fewer imports and more fresh, local food, including fish and vegetables, are needed in people’s diets, he says.
Imported food in the past came mainly from Australia and New Zealand, but much of it now comes from China, Malaysia and the Philippines. These foods are often energy-dense and nutritionally poor, such as highly refined cereals and fatty meat, according to the Pacific Food Summit.
Lack of food safety regulations is a problem, with old, damaged and contaminated products arriving in the market as well as products with low mineral content that are high in sugar and fat.
Ireland’s economy is now expected to grow by at least 1 percent this year, following the good news Wednesday 30 June that the country is moving out of recession: after eight quarters of negative GDP growth, the country saw growth of 2.7 percent in the first quarter. Over the past two years Ireland’s GDP has fallen by some 15 percent.
Ireland was the first economy in the eurozone to slip into recession and suffered eight consecutive quarters of negative GDP growth. GNP negative growth was even worse, falling by over 17 percent.
The good news was accompanied by bad, however, with the unemployment rate in Ireland rising to 13.4 percent.
Links to other sites: CNN, Irish Times
The European Union has begun its one-day summit, seeking to adopt a long-term economic plan, with an appeal to its members to overhaul budget rules to prevent the economy from sagging further.
Herman Van Rompuy called on leaders of the 27 states, to financial discipline. One of the main topics of discussion in Brussels will be the debt-laden, Spain.
It is expected that Spain will talk about its recent budget cuts. European leaders have said there are no plans to discuss a possible bailout for the country.
Other sources: Taiwan News, The Guardian, The Associated Press
Swiss franc balancing act: which way will it go?
Bern, Switzerland (GenevaLunch) – The Swiss franc, much in the news lately as a possible currency of flight from the weakening euro, could have a damping effect on the performance of the Swiss economy.
But it’s not accurate for now to speak of the franc strengthening in real terms, says the federal government’s Expert Group on Economic Forecasts, which nevertheless argues that “the greatest economic risk for Switzerland is still likely to be a suddenly excessive appreciation of the franc in relation to the euro (flight to the franc as a safe haven).
It defines a damping effect as an exchange-rate-related decline in price competitiveness. “The long-term comparison, i.e., since the adoption of the European currency in 1999, of the real exchange rate of the franc in relation to the euro (i.e., the nominal market trend adjusted for inflation) despite the revaluation of the past month does not lie at an above-average level (e.g., still below the level of 2002-2003),” the group notes.
The franc has depreciated in relation to other “significant” currencies such as the US dollar and the Japanese yen since the start of 2010. ” Within the context of the present exchange rate, future export growth is therefore likely to be slightly decelerated but not stalled.”
The Expert Group issues quarterly forecasts for the Swiss government.
“Selected forecasts” is a set of tables issued 8 June by the Swiss finance ministry.
Cleanup in Bangkok underway, gunshot injuries reported
The Thai government is moving to close the red-shirts protesters encampment but appears to be having mixed success and is reported to be shooting at some intersections in the heart of commercial Bangkok, with several injuries reported Friday. At least one person was killed Thursday, but details remain murky and journalists in the city report that it is difficult to obtain numbers of people injured, from hospitals. The crisis in Thailand is now having a stronger impact on the economy, which relies heavily on tourism. Reuters reports that “the cost of insuring Thai debt jumped the most in 15 months and Thai bond yields fell to a nine-month low on Friday as the wave of violence prompted investors to rush to the relative safety of government debt. Five-year credit default swaps, used to hedge against debt default but also to speculate on country risk, jumped by more than 30 basis points to 142 basis points.”
Links to other sites: Bangkok Post, BBC, Reuters
