Country Risk Service Switzerland 1st Quarter Updater

  • ID: 4472551
  • Country Profile
  • Region: Switzerland
  • 18 Pages
  • The Economist Intelligence Unit
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Economic growth shows signs of improvement and the Swiss franc continues to weaken. The Economist Intelligence Unit expects that small budget surpluses will help to reduce the government debt/GDP ratio from 29.8% in 2017 to 28% in 2019.

The Swiss franc appreciated sharply after the Swiss National Bank (SNB, the central bank) ended its exchange-rate ceiling of CHF1.20:EUR1 in January 2015. It has since reversed much of this move, depreciating to a low of CHF1.18:EUR1 by mid-January 2018 before strengthening slightly to CHF1.16:EUR1 in March. We expect the exchange rate to continue to normalise, but bouts of safe-haven demand will remain a risk for the foreseeable future.

Direct exposure to the euro zone periphery is limited. Swiss banks' ratio of non-performing to total loans stood at 0.78% in mid-2016 (latest available data), and regulators have applied more stringent capital requirements to the largest banks. Ultra-low interest rates weigh on profitability, and overheating in the real estate market remains a risk, but home price growth has cooled in the past year.
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Country Risk Service Switzerland 1st Quarter Updater

Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk

Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Central scenario for 2018-22: Political stability

Central scenario for 2018-22: Election watch

Central scenario for 2018-22: International relations

Central scenario for 2018-22: Policy trends

Central scenario for 2018-22: Fiscal policy

Central scenario for 2018-22: Monetary policy

Central scenario for 2018-22: Economic growth

Central scenario for 2018-22: Inflation

Central scenario for 2018-22: Exchange rates

Central scenario for 2018-22: External sector

Key risk indicators

Ratings summary

Quarterly indicators

International assumptions summary

Economic structure

Public finances

Exchange rates, interest rates and prices

Financial sector

Current account

Foreign payment and liquidity indicators

External trade
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