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3 Dec 2014
Swiss GDP rebounds in Q3 – ING
FXStreet (Barcelona) - The ING Team notes that Swiss GDP rebounded in Q3 by growing 0.6%, but doesn’t see it influencing a monetary policy change.
Key Quotes
“The Swiss economy grew by 0.6% in the third quarter. Domestic demand is set for a soft landing in 2014 but more positive signs from the Euro area could lift growth up again in 2015.”
“Domestic demand has been weakening since the beginning of the year, although private consumption is recovering: it grew by 0.6% QoQ in the third quarter after 0.3% QoQ in the second so that 2014 growth should be limited to 1.2%. If the labour market is still backing an increase in consumer confidence, deflation fears remains a brake to purchase intentions in the retail sector. This could continue to dampen private consumption growth in coming quarters.”
“All in all, after having reached 1.9% of GDP growth in 2013, the Swiss economy is set for a soft landing in 2014. While private consumption is likely to remain affected by deflation fears and investments by the uncertainty of the Eurozone recovery, growth prospects remain limited.”
“However, there are some upsides: the United States are growing quickly, energy prices are pushing costs downwards, the German economy is slowly accelerating while a new mix of investment plans and quantitative easing should help the Eurozone to see a light at the end of the tunnel. This is why we think that the Swiss economy could rebound somewhat in 2015 after 1.7% growth in 2014. However, at this stage, it is hard to count upon a 2015 growth rate above 2.0%.”
“This mild growth outlook should be no cause for a strong monetary policy change. We expect the SNB to remain remain ready to act to support its floor under the CHF against the euro. If further FX interventions should be limited, other unconventional measures could be taken as soon as next week to counter the effects on CHF demand of the decreasing spread between Euro and CHF bond yields.”
Key Quotes
“The Swiss economy grew by 0.6% in the third quarter. Domestic demand is set for a soft landing in 2014 but more positive signs from the Euro area could lift growth up again in 2015.”
“Domestic demand has been weakening since the beginning of the year, although private consumption is recovering: it grew by 0.6% QoQ in the third quarter after 0.3% QoQ in the second so that 2014 growth should be limited to 1.2%. If the labour market is still backing an increase in consumer confidence, deflation fears remains a brake to purchase intentions in the retail sector. This could continue to dampen private consumption growth in coming quarters.”
“All in all, after having reached 1.9% of GDP growth in 2013, the Swiss economy is set for a soft landing in 2014. While private consumption is likely to remain affected by deflation fears and investments by the uncertainty of the Eurozone recovery, growth prospects remain limited.”
“However, there are some upsides: the United States are growing quickly, energy prices are pushing costs downwards, the German economy is slowly accelerating while a new mix of investment plans and quantitative easing should help the Eurozone to see a light at the end of the tunnel. This is why we think that the Swiss economy could rebound somewhat in 2015 after 1.7% growth in 2014. However, at this stage, it is hard to count upon a 2015 growth rate above 2.0%.”
“This mild growth outlook should be no cause for a strong monetary policy change. We expect the SNB to remain remain ready to act to support its floor under the CHF against the euro. If further FX interventions should be limited, other unconventional measures could be taken as soon as next week to counter the effects on CHF demand of the decreasing spread between Euro and CHF bond yields.”