The FINANCIAL — Swiss economic expectations edged up to an 18-month high in September on the belief that growth in Switzerland’s key export market, the eurozone, will blunt the impact of a strong franc on the Alpine country’s economy, according to Nasdaq.
A survey by the ZEW Institute and Credit Suisse Group, released on September 16, showed the overall headline index of investor and analyst expectations rose to 9.7 points this month, its highest since March 2014, from 5.9 in August.
The index has risen steadily since its record slide in February after the Swiss central bank dropped its cap on the franc, which sent the currency surging against the euro, making Swiss goods more pricey in their key market.
However the franc has since depreciated to around 1.0950 per euro, the lowest level since the currency was allowed to float free on Jan. 15.
Only 17% of analysts surveyed expect the franc to appreciate against the euro over the next six months, said Credit Suisse.
Still, the Swiss National Bank judges the franc as being overvalued, and together with the government has lowered its forecasts for growth to factor in the hurdles facing Swiss companies in a market that buys almost half the country’s exports.
The Swiss government has cut its 2015 growth forecast to 0.8% from the 2.1% it projected before the SNB repealed the franc’s cap. The central bank expects the economy to expand by “just under 1%.”
The SNB meets Thursday to review its monetary policy, with most analysts expecting it to keep its key rate unchanged at minus 0.75%.
The latest ZEW data contrasts with the equivalent ZEW survey in Germany, the most important single market for Swiss exports, which hit its lowest level in 10 months in September, data showed on September 15.