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Country Risk Service Switzerland 1st Quarter Updater

  • ID: 4472551
  • Country Profile
  • Region: Switzerland
  • 17 Pages
  • The Economist Intelligence Unit
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In The Economist Intelligence Unit's last ratings report in December 2018 the sovereign risk score deteriorated by 1 point, to 16, but the rating remained at AA. Economic growth is firm and the Swiss franc continues to weaken. We expect that small budget surpluses in 2019-20 will help to reduce the debt/GDP ratio, from 29.5% in 2017 to less than 28% in 2020.

The currency risk score and rating remained at 20 and A respectively. The Swiss franc appreciated sharply after the Swiss National Bank (SNB, the central bank) abandoned the ceiling of CHF1.20:EUR1 in January 2015. The Swiss franc has weakened since then and averaged CHF1.16:EUR1 in 2018. We expect it to average CHF1.17:EUR1 in 2019-20, but geopolitical risks, leading to bouts of safe-haven demand, will continue to present risks.

The banking sector risk score and rating remained at 18 and AA respectively. Direct exposure to the euro zone periphery is limited. Swiss banks' ratio of non-performing loans to total loans was 0.64% at the end of 2017 (latest available data), and large banks face stringent capital requirements. However, ultra-low interest rates weigh on banks' profitability.
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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 2019-23: Political stability

Central scenario for 2019-23: Election watch

Central scenario for 2019-23: International relations

Central scenario for 2019-23: Policy trends

Central scenario for 2019-23: Fiscal policy

Central scenario for 2019-23: Monetary policy

Central scenario for 2019-23: Economic growth

Central scenario for 2019-23: Inflation

Central scenario for 2019-23: Exchange rates

Central scenario for 2019-23: 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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