Switzerland expected recession in 2015 because of the monetary shock – Boursorama

Switzerland expected recession in 2015 because of the monetary shock – Boursorama

The Swiss franc too “strong” could cause a recession in the country and a slow rise in unemployment.

impact of the Swiss franc, which occurred on January 15, continues to be felt in unexpected proportions. After causing significant losses in the financial sector, the decision of the SNB could plunge the country into recession next year.

The situation KOF institute warned Wednesday, January 28 early in the day that Switzerland could experience a decline of around 0.5% of GDP over the whole of 2015. The heart of the recession would be expected in the summer according to institute nevertheless puts the duration of the phenomenon in terms of “brief recession.”

Revised forecast

A Swiss recession seemed particularly unlikely there yet three weeks. Now, all forecasts are revised downwards. Le Figaro as noted in the middle of the afternoon, “it is a revision even more pessimistic than that of the UBS bank, the day after the Swiss franc jumped 20% had lowered its growth forecast from 1.8% to 0.5% for 2015 “

The reason:. forecasting a slowdown of Swiss exports and thus a contraction results businesses and economic activity. As a reminder, the Swiss National Bank (SNB) decided on January 15 to remove the parity floor between the euro and the Swiss franc, causing an immediate appreciation of the Swiss franc by 20% against all other currencies. Goods produced in Switzerland therefore now cost about 20% more than in the other countries of the world, making them less affordable. Similarly, sightseeing in Switzerland will cost far more foreign than before. Many sources of income could therefore diminish and cause a recession in economic activity

lift unemployment

Another unintended consequence. The strong Swiss franc could cause tensions on the labor market and cause a rise in the medium to long-term unemployment by KOF institute. It forecasts a 3.4% unemployment of the labor force in 2015 (against 3.2% in 2014, a record low at European level) and an acceleration to 4.1% in 2016.

However, says Le Figaro “KOF Forecasters warn that” violent shock “as the sudden rise of the franc weaken even the reliability of the forecasts. This figure of a GDP decline of 0.5% is to be taken with even more caution than any forecast “

The ad bit troubled investors. The SMI index of the Swiss Exchange contracted only 0.4% Wednesday at 15h50 in the average of other European markets.

X.Bargue

Find our articles about the impact of the Swiss franc

– January 15: Crash of the Swiss Exchange: -8.67% to close after passing -13% in session

– January 16: Second fall of the Swiss Exchange (-5.96% to date): why such a decision by the SNB

– January 21: Clash of the Swiss franc: hundreds of millions of losses in finance