The financial crisis that had been brewing for over a year finally impacted Switzerlands real economy in late fall 2008. Until the end of October, the Swiss economy had held up considerably better than the economies of most other industrialized nations. But with the US, Japan and a host of European countries already in recession for several quarters, the Swiss economy was unlikely to defy the downward trend for much longer. The economists at Credit Suisse expect Switzerlands gross domestic product (GDP) to decline by 0.6% in 2009. They forecast an inflation rate of 0.7%.
Fall 2008 saw a massive deterioration in the economic environment. Contrary to expectations, the risks forecast by Credit Suisse in September 2008 rapidly materialized as realities. The crisis on the financial and credit markets has continued to spread and has spilt over into the real economy. The current economic environment is dominated by major uncertainties stemming from a general loss of trust in the economy, and extremely volatile financial markets that have lost all sense of direction. This is reflected, for instance, by the new lows to which consumer sentiment and the investment climate have plummeted. For that reason, the Credit Suisse economists are lowering their forecasts for 2009.
To view the full report please visit the Credit Suisse web-site.
D.C.