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UBS Outlook Switzerland: Upbeat into 2013 despite downside risks
The Swiss economy will grow by about one percent this year. This is the forecast of economists from the Chief Investment Office (CIO) at UBS in the latest issue of UBS Outlook Switzerland. The UBS publication describes the baseline scenario as well as the upside and downside risks for the international and national economy as well as the real estate, foreign exchange and bond markets.
Zurich/Basel, 31 January 2013 – The UBS baseline scenario forecasts growth of around one percent for the Swiss economy in the year that has just begun. UBS economists also describe the upside and downside risks for the economy. Inflation is likely to remain low for the time being – UBS expects an average annual inflation rate of only 0.2 percent this year. Starting in 2014, however, there is high potential for prices to rise.
With regard to exchange rate development, UBS analysts expect that EURCHF will again stabilize between 1.21 and 1.23 following the latest revaluation of the euro against the Swiss franc. The euro would only become stronger if the economy were to make a strong global recovery (10 percent probability). In contrast, the probability of the downside scenario with an increase in total debt is 15 percent.
In their baseline scenario, UBS economists consider the real estate market to be already overvalued, at least in certain regions; the price cycle is likely to end in 2014. If long-term interest rates were to rise, however, prices could slump as early as this year.
UBS Outlook Switzerland also includes the sector panorama with evaluations of the quarterly survey among industrial and service companies. According to the survey, the economic situation in the service sectors has cooled somewhat. UBS economists nevertheless expect that this slowdown in the third sector was largely compensated by the improved economic position of industrial companies.
The supplement Investing in Switzerland is also included, with assessments by analysts from CIO WM Research on the equity market and bonds in Switzerland.
Daniel Kalt, UBS Chief Economist Switzerland
Tel. +41 44 234 25 60, firstname.lastname@example.org
Caesar Lack, UBS CIO Wealth Management Research
Tel. +41 44 234 44 13, email@example.com
Sibille Duss, UBS CIO Wealth Management Research
Tel. +41 44 235 69 54, firstname.lastname@example.org
Stefan R. Meyer, UBS CIO Wealth Management Research
Tel. +41 44,235 38 26, email@example.com
UBS Outlook Switzerland: www.ubs.com/research
UBS publications and forecasts for Switzerland: www.ubs.com/economicresearch