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Switzerland: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Switzerland
Author:
International Monetary Fund. European Dept.
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Series:
IMF Staff Country Reports
Volume/Issue:
Volume 2023: Issue 196
Language:
English
Publication Date:
07 Jun 2023
DOI:
https://doi.org/10.5089/9798400243127.002
ISBN:
9798400243127
ISSN:
1934-7685
Pages:
67
Keywords:
draft legislation; SNB balance sheet; FSI website; AML ordinance; investment strategy; well-functioning of financial markets; banking stress test model; Switzerland's GDP; Switzerland well; SNB data; IMF of the exchange restriction; IMF's transparency policy; Inflation; Credit; Financial statements; Central bank policy rate; Global
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This 2023 Article IV Consultation with Switzerland discusses that growth slowed in 2022, while inflation became a new challenge after a decade of ultra-low or negative inflation. Growth is expected to slow further in 2023—driven by the weak global outlook, tighter monetary policy, and cooling of pent-up demand, before recovering to medium-term potential in 2024. Risks are tilted to the downside, with high uncertainty. Two near-term scenarios are noteworthy. First, an abrupt, synchronized global slowdown could take place at the same time as prolonged high inflation in advanced economies, due to monetary policy miscalibration. Passage and implementation of the revised CO2 Law are critical to achieving climate targets; more is needed to ensure secure energy supply. Efforts to ease the tight labor market should continue. The response to higher inflation has been appropriate and should remain data driven, including further rate hikes if needed. If facing depreciation pressures, the Swiss National Bank could continue to reduce foreign exchange (FX) holdings; it should refrain from FX investments to curb appreciation unless due to excessive market volatility.
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Cover IMF Staff Country Reports
IMF Staff Country Reports
ISSN:
1934-7685
Publisher:
International Monetary Fund