Previous post Next post

IMF forecasts 2.25 percent Swiss GDP growth in 2018 while pointing to risks

A boost to investment and net exports from the tailwind of strong external demand, together with faster expansion of household spending owing to rising employment, are forecast to lift GDP growth to around 2¼ percent in 2018, said the IMF in a statement referring to Switzerland issued on 26 March 2018.

Swiss Francs

© Tibor Ritter | Dreamstime.com - Click to enlarge

On the downside the IMF said: rising international trade tensions could impact Switzerland’s externally-oriented economy. More uncertain geopolitics could rekindle safe-haven inflows, sharply appreciating the franc and eroding competitiveness in less-productive sectors.

Uncertainty regarding long-term Swiss-EU relations could affect cross-border flows. Further delays in meeting international standards on corporate income taxation could reduce Switzerland’s appeal as an investment destination.

The report also points out risks lurking in the property market. Recently, mortgage lending standards have slipped with a significant share of new mortgages falling short of loan affordability norms. In addition, construction continues despite rising vacancy rates. These risks are compounded by high domestic exposure to real estate through direct and indirect ownership via pension funds.

Structural challenges

The IMF points out financial pressure related to Switzerland’s current retirement age. The official retirement age, which remains 65 for men and 64 for women, is low in the context of an average life expectancy of 83 years for women.

It recommends working longer or linking the official retirement age to life expectancy, and raising the full-time employment of women – whose participation is discouraged by high childcare costs.

 

Full story here
About Investec
Investec
Investec is a distinctive Specialist Bank and Asset Manager. We provide a diverse range of financial products and services to a niche client base in three principal markets, the United Kingdom, South Africa and Australia, as well as certain other geographies. Investec’s strategic goals are motivated by the desire to develop an efficient and integrated business on an international scale through the active pursuit of clearly established core competencies in the group’s principal business areas.
Previous post See more for 3.) Investec Next post
Tags: ,

Permanent link to this article: https://snbchf.com/2018/03/investec-imf-forecasts-2-25-swiss-gdp-growth-2018-pointing-risks/

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

This site uses Akismet to reduce spam. Learn how your comment data is processed.