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Country Risk Service Switzerland 1st Quarter Updater

  • ID: 4472551
  • Country Profile
  • March 2021
  • Region: Switzerland
  • 17 Pages
  • The Economist Intelligence Unit
The sovereign risk rating was unchanged, at AA, and the score improved by 2 points, to 19,in the last assessment as deflation eased. The rating is supported by low public debt (estimated at 31% of GDP in 2020) and a solid institutional background. The risk of external contagion owing to the highly open economic structure and wide budget deficit weigh on the rating.

The currency risk rating remained at A, but the score improved by 2 points, to 23, as real interest rates have turned positive and deflationary pressures eased at the end of the third quarter. A notable factor weighing on the rating is the contraction in real GDP. The rating is supported by persistently high current-account surpluses.

The banking sector risk rating remained at A, but the score improved marginally, to 23. The improvement is driven by the easing of deflationary pressures and real interest rates turning positive, both of which should facilitate demand for credit. The risk of sharp asset price devaluations poses a threat to banking sector stability. However, banks are well capitalised and non-performing loans are minimal.
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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 2021-25: Political stability

Central scenario for 2021-25: Election watch

Central scenario for 2021-25: International relations

Central scenario for 2021-25: Policy trends

Central scenario for 2021-25: Fiscal policy

Central scenario for 2021-25: Monetary policy

Central scenario for 2021-25: Economic growth

Central scenario for 2021-25: Inflation

Central scenario for 2021-25: Exchange rates

Central scenario for 2021-25: 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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