Quarterly Bulletin 2 / 2021 June - Swiss National Bank
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Quarterly Bulletin 2 / 2021 June
Quarterly Bulletin 2 / 2021 June Volume 39
Contents
Page
Monetary policy report 4
1 Monetary policy decision of 17 June 2021 5
Monetary policy strategy at the SNB 6
2 Global economic environment 7
3 Economic developments in Switzerland 13
4 Prices and inflation expectations 18
5 Monetary developments 21
Business cycle signals 28
Glossary 37
Chronicle of monetary events 42
Quarterly Bulletin 2 / 2021 June 3Monetary policy report
Report for the attention of the Governing Board of the Swiss
National Bank for its quarterly assessment of June 2021
The report describes economic and monetary developments in
Switzerland and explains the inflation forecast. It shows how the
SNB views the economic situation and the implications for
monetary policy it draws from this assessment. The first section
(‘Monetary policy decision of 17 June 2021’) is an excerpt from
the press release published following the assessment.
This report is based on the data and information available as at
17 June 2021. Unless otherwise stated, all rates of change from
the previous period are based on seasonally adjusted data and
are annualised.
Quarterly Bulletin 2 / 2021 June1 a year after the outbreak of the pandemic. GDP shrank
again in many countries in the first quarter, and remained
Monetary policy decision significantly below pre-crisis levels. The pandemic
situation has eased in many areas in recent months, and
of 17 June 2021 vaccination programmes are progressing. Containment
measures have thus been gradually relaxed in many
countries over the past several weeks.
The SNB’s baseline scenario for the global economy
anticipates that the major advanced economies will ease
containment measures further through to the summer.
Swiss National Bank maintains expansionary Against this backdrop, the SNB expects strong growth in
monetary policy the second and third quarters. However, the after-effects
The SNB is maintaining its expansionary monetary policy of the pandemic will continue to weigh on demand for
with a view to ensuring price stability and providing some time yet. Utilisation of global production capacity
ongoing support to the Swiss economy in its recovery is therefore likely to only gradually return to normal.
from the impact of the coronavirus pandemic. It is keeping
the SNB policy rate and interest on sight deposits at This scenario for the global economy is subject to high
the SNB at – 0.75%, and remains willing to intervene in the uncertainty, with risks on the upside and downside alike.
foreign exchange market as necessary, while taking the On the one hand, further waves of infection could slow
overall currency situation into consideration. The Swiss the economy once again. On the other, the monetary and
franc remains highly valued. The SNB’s expansionary fiscal policy measures implemented could support the
monetary policy provides favourable financing conditions, recovery more strongly than anticipated in the baseline
contributes to an appropriate supply of credit and liquidity scenario, as could a rapid improvement in consumer
to the economy, and counters upward pressure on the and business sentiment.
Swiss franc.
In Switzerland, too, the second wave of the pandemic
The new conditional inflation forecast for 2021 and interrupted the economic recovery at the beginning of the
2022 is slightly higher than in March (cf. chart 1.1). This year. The tightening of containment measures led to
is primarily due to higher prices for oil products and a renewed decline in GDP in the first quarter. However,
tourism-related services, as well as for goods affected by the contraction was much less pronounced than in the
supply bottlenecks. In the longer term, the inflation first wave of the pandemic in spring 2020.
forecast is virtually unchanged compared with March. The
new forecast stands at 0.4% for 2021, and 0.6% for both The economic indicators have improved significantly
2022 and 2023 (cf. table 1.1). The conditional inflation of late. This is in part attributable to the easing of public
forecast is based on the assumption that the SNB policy health measures in Switzerland, and in part to the
rate remains at – 0.75% over the entire forecast horizon. economic recovery abroad. Swiss GDP can therefore be
expected to show strong growth in the second quarter.
Coronavirus and the measures implemented to contain There are also signs of an improvement in the labour
it are continuing to shape the global economy more than market.
Chart 1.1
����������� ��������� �������� �� ���� ����
Year-on-year change in Swiss consumer price index in percent
2.0
1.5
1.0
0.5
0.0
– 0.5
– 1.0
– 1.5
2018 2019 2020 2021 2022 2023 2024
Inflation Forecast June 2021, Forecast March 2021,
SNB policy rate –0.75% SNB policy rate –0.75%
Source(s): FSO, SNB
Quarterly Bulletin 2 / 2021 June 5In its baseline scenario for Switzerland, the SNB Owing to the pandemic, the forecast for Switzerland,
anticipates a continuation of the economic recovery in as for the global economy, remains subject to heightened
the second half of the year. This is also based on the uncertainty.
assumption that the containment measures will be eased
further. Mortgage lending and residential property prices have
risen strongly in recent quarters. Overall, the vulnerability
Against this backdrop, the SNB expects GDP growth of of the mortgage and real estate markets has increased
around 3.5% for 2021. The upward revision compared further. The SNB regularly reassesses the need for the
with March is primarily attributable to the lower-than- countercyclical capital buffer to be reactivated.
expected decline in GDP in the first quarter. Swiss GDP is
likely to return to its pre-crisis level by the middle
of the year. However, production capacity will remain
underutilised for some time yet.
Monetary policy strategy at the SNB inflation to fluctuate somewhat with the economic cycle.
The SNB has a statutory mandate to ensure price stability Second, the SNB summarises its assessment of the
while taking due account of economic developments. situation and of the need for monetary policy action in a
quarterly inflation forecast. This forecast, which is based
The SNB has specified the way in which it exercises this on the assumption of a constant short-term interest rate,
mandate in a three-part monetary policy strategy. First, shows how the SNB expects the CPI to move over the
it regards prices as stable when the Swiss consumer next three years. As the third element in implementing its
price index (CPI) rises by less than 2% per annum. This monetary policy the SNB sets the SNB policy rate, and
allows it to take account of the fact that the CPI slightly seeks to keep the secured short-term Swiss franc money
overstates actual inflation. At the same time, it allows market rates close to this rate.
Table 1.1
observed inflation in june 2021
2018 2019 2020 2021 2018 2019 2020
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Inflation 0.7 1.0 1.1 0.9 0.6 0.6 0.3 – 0.1 – 0.1 – 1.2 – 0.9 – 0.7 – 0.4 0.9 0.4 – 0.7
Source(s): FSO
conditional inflation forecast of june 2021
2021 2022 2023 2024 2021 2022 2023
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Forecast March 2021,
SNB policy rate – 0.75% – 0.4 0.3 0.5 0.6 0.5 0.4 0.3 0.4 0.4 0.5 0.6 0.6 0.2 0.4 0.5
Forecast June 2021,
SNB policy rate – 0.75% 0.5 0.7 1.0 0.8 0.6 0.4 0.4 0.5 0.5 0.6 0.7 0.8 0.4 0.6 0.6
Source(s): SNB
6 Quarterly Bulletin 2 / 2021 June2 Chart 2.1
Global economic ����� ���� �����
Average of depicted period = 100
environment Index
120
115
110
105
100
95
Coronavirus and the measures implemented to contain
90
it are continuing to shape the global economy more than
85
a year after the outbreak of the pandemic. Significant
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
containment measures were in force in numerous countries
in the winter and through into the spring. Added to this, World Advanced economies
the public in part avoided activities associated with a higher Emerging economies
risk of infection. This took its toll on economic activity. Source(s): CPB Netherlands Bureau for Economic Policy Analysis, Refinitiv
GDP shrank again in many countries in the first quarter, Datastream
and remained significantly below pre-crisis levels.
Employment was also still lower in the first quarter than
at the end of 2019. However, global trade showed a
stronger recovery (cf. chart 2.1). This is likely to be in
part attributable to the shift in consumer demand from
services to goods, owing to the containment measures.
The pandemic situation has eased in many areas in recent
months, and vaccination programmes are progressing.
Containment measures have thus been gradually relaxed
in many countries over the past several weeks. The SNB’s
baseline scenario for the global economy anticipates that
the major advanced economies will ease such measures
further through to the summer. Against this backdrop, the
SNB expects strong growth in the second and third
quarters.
Table 2.1
baseline scenario for global economic developments
Scenario
2017 2018 2019 2020 2021 2022
GDP, year-on-year change in percent
Global 1 3.8 3.6 2.8 – 3.3 7.0 4.6
US 2.3 3.0 2.2 – 3.5 6.4 4.2
Euro area 2.7 1.9 1.3 – 6.7 4.4 4.3
Japan 1.7 0.6 0.0 – 4.7 2.8 3.6
2
China 7.0 6.8 6.0 2.0 9.5 6.2
Oil price in USD per barrel 54.3 71.0 64.3 41.8 65.3 67.0
1 World aggregate as defined by the IMF, PPP-weighted.
2 The annual figures are based on seasonally adjusted data and can therefore differ slightly from the official annual figures.
Source(s): Refinitiv Datastream, SNB
Quarterly Bulletin 2 / 2021 June 7Chart 2.2 However, the after-effects of the pandemic will continue
to weigh on demand for some time yet. Utilisation of global
����� �������
production capacity is therefore likely to only gradually
Index % return to normal. Inflation is thus expected to be only
180 100 moderate in most countries over the medium term. That
said, the higher oil prices and various one-off effects
160 80 are bringing about a temporary rise in global inflation
this year.
140 60
The baseline scenario for the global economy is subject
120 40
to high uncertainty, with risks on the upside and downside
100 20
alike. On the one hand, further waves of infection could
slow the economy once again. On the other, the monetary
80 0 and fiscal policy measures implemented could support
2017 2018 2019 2020 2021 the recovery more strongly than anticipated, as could a
rapid improvement in consumer and business sentiment.
MSCI World (lhs; beginning of period = 100)
Implied volatility (VIX) (rhs)
The SNB’s forecasts for the global economy are based on
Source(s): Refinitiv Datastream
assumptions about oil prices and the EUR/USD exchange
rate. The SNB is assuming an oil price for Brent crude of
USD 67 per barrel, compared with USD 59 in the last
Chart 2.3
baseline scenario, and continues to anticipate an exchange
������������� ����-���� �������� ����� rate of USD 1.21 to the euro. Both correspond to the 20-day
10-year government instruments average when the current baseline scenario was drawn up.
%
INTERNATIONAL FINANCIAL AND
4
COMMODITY MARKETS
3
Financial market sentiment has remained positive in recent
2 months. The progress of vaccination programmes has
made further reopening possible, a move that has particularly
1 benefited the services sector. The MSCI World Index
climbed to a new all-time high amid optimism over the
0 economic outlook. The implied volatility of stocks as
measured by option prices – e.g. the VIX in the US –
–1 receded further, almost returning to its pre-pandemic
2017 2018 2019 2020 2021 level (cf. chart 2.2).
US Japan Germany
Source(s): Refinitiv Datastream Having risen in the first quarter, yields on ten-year
government bonds subsequently presented a mixed
picture. While they stabilised in the US at lower levels
Chart 2.4
than at the end of March, the slow return to economic
optimism in Europe saw yields on German government
�������� ����-���� �������� ����� bonds increase somewhat. As a result, the interest rate
10-year government instruments differential between US and German government bond
% yields has narrowed (cf. charts 2.3 and 2.4). The lower
5 US interest rates as well as the upbeat risk sentiment have
meant that the dollar weakened again somewhat on a
4
trade-weighted basis. The euro, by contrast, appreciated
3 slightly owing to the smaller interest rate differential.
2
The pound sterling trended sideways, while the yen
continued to lose value (cf. chart 2.5).
1
0 Driven by the global economic recovery, commodity
prices picked up across a broad front. At over USD 74 per
–1
barrel, oil prices reached levels last seen in mid-2019.
2017 2018 2019 2020 2021
Support in this regard has come from declining inventory
Germany France Italy levels as well as the supply discipline of OPEC+ states.
Spain Portugal Industrial metal prices also increased further (cf. chart 2.6).
Source(s): Refinitiv Datastream
8 Quarterly Bulletin 2 / 2021 JuneUNITED STATES Chart 2.5
The economic upswing in the US gathered pace at the �������� �����
Trade-weighted
beginning of the year. This was attributable, on the one
hand, to falling coronavirus infection rates and the easing Index, beginning of period = 100
of containment measures. On the other, the expansionary 115
fiscal policy lent support to this development. As a result,
110
GDP grew in the first quarter by 6.4%, and was just
under 1% lower than before the pandemic (cf. chart 2.7). 105
Unemployment declined in recent months and stood at
100
5.8% in May (cf. chart 2.9). Although employment figures
increased, they were still below their pre-crisis level. 95
90
Economic signals for the second quarter are favourable
and point to consistently dynamic development. Moreover, 85
the fiscal stimulus packages approved by Congress in 2017 2018 2019 2020 2021
December 2020 and March 2021 will boost the economy.
USD JPY EUR GBP
These include one-time cash payments and tax rebates
for households, forgivable loans to small and medium- Source(s): Refinitiv Datastream
sized enterprises, a temporary extension of unemployment
benefits as well as additional funding for the healthcare
Chart 2.6
system and state governments. For 2021, the SNB is now
expecting US GDP growth to be somewhat higher, at �������� ������
6.4%. The forecast for 2022 remains virtually unchanged
at 4.2% (cf. table 2.1). Index, beginning of period = 100 USD/barrel
220 90
Annual inflation as measured by the CPI increased 200 80
considerably in recent months and stood at 5.0% 180 70
in May (cf. chart 2.10). This reflected not only rising 160 60
energy prices, but also markedly higher core inflation 140 50
(cf. chart 2.11). The surge in core inflation is primarily
120 40
due to price increases for used cars and transport services,
100 30
and is likely to be temporary. Core inflation as measured
by the personal consumption expenditure deflator likewise 80 20
rose and, at 3.6% in April, significantly exceeded the 60 10
US Federal Reserve’s target. 2017 2018 2019 2020 2021
Commodities Industrial metals
Given that the Fed considers the rise in inflation to be Oil: Brent (rhs)
temporary, a monetary policy adjustment was not deemed Source(s): Refinitiv Datastream
necessary. It thus kept its target range for the federal
funds rate unchanged at 0.0–0.25% (cf. chart 2.12). It
plans to leave interest rates at their current level until the Chart 2.7
labour market has recovered from the crisis, and until
inflation has risen to 2% and is on track to moderately ���� ��
exceed 2% for some time. In so doing, the Fed is seeking Index, Q4 2019 = 100
to achieve a rate that averages 2%. It will continue its
110
bond-buying programme until substantial further progress
has been made with regard to its employment mandate 105
and inflation target. 100
95
90
85
80
2017 2018 2019 2020 2021
US Japan Euro area China 1
1 Seasonal adjustment: SNB
Source(s): Refinitiv Datastream
Quarterly Bulletin 2 / 2021 June 9Chart 2.8 EURO AREA
���������� ��������’ �������
(�������������) In the first quarter, GDP contracted in the euro area
by 1.3%, remaining considerably below its pre-crisis
Index level (cf. chart 2.7). The tightening and extension of
65 containment measures in many member states weighed on
60 the services sector in particular. Moreover, manufacturing
was hit by a global shortage of intermediate products.
55
GDP fell substantially in Germany, while the decline in
50 France and Italy virtually stagnated. Employment in
45 the euro area decreased marginally in the first quarter amid
sluggish economic growth, and remained lower than
40
before the pandemic. Unemployment eased back slightly,
35 however, to stand at 8.0% in April, having peaked at
30 8.7% in mid-2020 (cf. chart 2.9).
2017 2018 2019 2020 2021
US Japan Euro area China
Since the end of April, infection rates have been on
the decline in all the major euro area member states.
Source(s): Institute for Supply Management (ISM), Markit Economics Limited
Additionally, the pace of vaccination has been stepped
up considerably in recent months. This allowed
containment measures to be eased gradually over the
Chart 2.9
course of the second quarter. Most of the remaining
������������ ����� economic restrictions are expected to be lifted by the
beginning of the third quarter. Given that the restrictions
% were in place somewhat longer than anticipated, it is
16 likely that the recovery will be slower – but still strong –
14 in the current year. The SNB expects GDP growth
of 4.4% for 2021 and 4.3% for 2022 (cf. table 2.1).
12
10 Driven by rising energy prices, consumer price inflation
in the euro area picked up substantially in recent months
8
and stood at 2.0% in May. Core inflation has fluctuated
6 sharply since the beginning of the year and was last
4 recorded at 0.9% (cf. charts 2.11 and 2.12).
2
The European Central Bank left its key interest rates
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 unchanged (cf. chart 2.12) It intends to maintain them at
US Japan Euro area their present levels or lower until inflation dynamics
Source(s): Refinitiv Datastream are sufficiently robust. The ECB plans to continue with
its asset purchase programme (APP) until shortly before
it starts raising the key interest rates. Furthermore,
Chart 2.10 the pandemic emergency purchase programme (PEPP),
introduced during the coronavirus crisis, is to run until
�������� ������ at least the end of March 2022. In June, the ECB decided
Year-on-year change to continue into the third quarter the higher pace of asset
% purchases it had announced in March 2021.
6
4
2
0
–2
2017 2018 2019 2020 2021
US Japan Euro area China
Source(s): Refinitiv Datastream
10 Quarterly Bulletin 2 / 2021 JuneJAPAN Chart 2.11
���� ��������� �����
Having staged a strong recovery in the second half
Year-on-year change
of 2020, Japan’s GDP contracted by 3.9% in the first
quarter following a renewed wave of infections and %
tightening of containment measures in the winter months 4
(cf. chart 2.7). GDP remained below its pre-crisis level.
3
Private consumption was particularly hard hit by mobility
constraints and the restrictions mandated in the services 2
sector. Exports, by contrast, recovered further, as reflected
in robust growth in manufacturing output. Employment 1
recently dipped once again, remaining considerably lower 0
than before the pandemic. The unemployment rate stood
at 2.8% in April (cf. chart 2.9). –1
2017 2018 2019 2020 2021
Following the gradual easing of containment measures in
US Japan Euro area China
March, the number of new infections started to rise again.
1 Excluding food and energy
Some prefectures – including Tokyo and Osaka – have
Source(s): Refinitiv Datastream
been in another state of emergency since the end of April.
The restrictions under the new emergency declaration
are somewhat stricter than those imposed in winter and
Chart 2.12
are likely to further delay the economic upswing. Once
the emergency has been lifted, however, the country’s �������� �������� �����
recovery should continue at a robust pace, driven by rising
global demand. The SNB now expects GDP expansion %
to be somewhat lower for 2021, at 2.8%, but anticipates 3.0
stronger growth of 3.6% for 2022 (cf. table 2.1). 2.5
2.0
At – 0.2%, core inflation slipped back into negative 1.5
territory in April (cf. chart 2.11). The decline was 1.0
attributable to reduced prices in mobile communication. 0.5
Inflation is likely to remain volatile in the short term. 0.0
– 0.5
The Bank of Japan left its targets under the yield curve 2017 2018 2019 2020 2021
control programme unchanged (cf. chart 2.12).
US 1 Japan 2
Euro area 3 China 4
1 Federal funds rate (upper limit of target range) 2 Call money target rate
3 Deposit facility rate 4 Reverse repo rate (7-day)
Source(s): Refinitiv Datastream
Chart 2.13
Quarterly Bulletin 2 / 2021 June 11CHINA Following the easing of containment measures, economic
activity started to recover from March. GDP growth is
After recovering rapidly over the course of last year, therefore likely to pick up again in the second quarter. The
economic activity in China weakened temporarily in the government has meanwhile begun to gradually unwind
first quarter. As a result, GDP deviated slightly again its economic stimulus measures. In this context, the central
from its pre-crisis trend, which it had reached in the second bank has introduced a phased normalisation of the credit
half of 2020 (cf. chart 2.7). This was due to the emergence supply, but has left its key rates unchanged (cf. chart 2.12).
of new virus hotspots in some parts of the country and the
reintroduction of containment measures, which restricted Supported by rising fuel prices, consumer price inflation
travel for the Chinese New Year and, in particular, held increased to 1.3% in May, having been slightly negative at
back growth in consumption. Exports, by contrast, the beginning of the year. Core inflation climbed to 0.9%
continued to develop favourably. (cf. charts 2.10 and 2.11).
12 Quarterly Bulletin 2 / 2021 June3 Chart 3.1
Economic developments ���� ��
% Index, Q4 2019 = 100
in Switzerland 40 104
30 102
20 100
10 98
0 96
The second wave of the pandemic interrupted the economic – 10 94
recovery in Switzerland. The tightened containment
– 20 92
measures led to a renewed decline in GDP in the first
quarter. However, the contraction was much less pronounced – 30 90
than in the first wave of the pandemic in spring 2020. 2017 2018 2019 2020 2021
Change from previous period Level (rhs)
The economic indicators have improved significantly
of late. This is in part attributable to the easing of public Source(s): SECO
health measures in Switzerland, and in part to the
economic recovery abroad. Swiss GDP can therefore be
Chart 3.2
expected to show strong, broad-based growth in the
second quarter. There are also signs of an improvement ��� �������� ����� �����
in the labour market.
Standardised
In its baseline scenario for Switzerland, the SNB anticipates 6
a continuation of the economic recovery in the second
4
half of the year. This is also based on the assumption that
the containment measures will be eased further.
2
Against this backdrop, the SNB expects GDP growth 0
of around 3.5% for 2021. In March, the SNB was
still anticipating that growth would not be as high. The –2
upward revision is primarily attributable to the lower-
than-expected decline in GDP in the first quarter. –4
GDP is likely to return to its pre-crisis level by the middle –6
of the year. However, production capacity will remain 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
underutilised for some time yet. Owing to the pandemic, Source(s): SNB
the forecast for Switzerland, as for the global economy,
remains subject to heightened uncertainty.
Chart 3.3
OUTPUT AND DEMAND
������������� ��� ��� ��� ��������
The SNB takes a wide range of information into account ���������
when assessing the economic situation. In the first Index Index
quarter, economic activity declined again as a result of 70 150
the tightening of containment measures. Economic
conditions have improved considerably in recent months,
60 125
however, amid the easing of restrictions.
50 100
40 75
30 50
12 13 14 15 16 17 18 19 20 21
PMI KOF Economic Barometer (rhs)
Source(s): Credit Suisse, KOF Swiss Economic Institute
Quarterly Bulletin 2 / 2021 June 13GDP decline in first quarter Considerable recovery since March
Economic growth was very weak in the fourth quarter of Various economic indicators point to a pronounced
2020 and the first quarter of 2021 in the wake of the second upswing in economic activity in recent months, with
pandemic wave. According to the initial estimate by retail sales, for instance, growing strongly following
the State Secretariat for Economic Affairs (SECO), GDP the reopening of shops at the beginning of March. The
contracted by 2.0% in the first quarter of 2021, having hospitality and entertainment industries also showed
stagnated in the previous quarter. As a result, first-quarter signs of improvement, while industries less affected by
GDP was still 2.2% below its pre-crisis level at the end the restrictions continue to recover. Goods exports
of 2019 (cf. chart 3.1). and the company survey results suggest strong momentum
in manufacturing, in particular (cf. chart 3.3).
Growth continued to vary widely across the industries.
Value added fell in several areas, particularly in those The SNB’s Business Cycle Index and the KOF Economic
directly affected by the restrictions (retail trade, hospitality Barometer aim to depict overall economic momentum
and entertainment). Meanwhile, in manufacturing on a monthly basis. Both indicators point to growth that is
and financial services, value added saw a significant rise. clearly above average (cf. charts 3.2 and 3.3). The talks
held by the SNB’s delegates for regional economic relations
The majority of final demand components decreased. with companies also suggest robust growth in the second
The decline in private consumption was especially quarter (cf. ‘Business cycle signals’, pp. 28 et seq.).
pronounced. By contrast, government consumption and
trade in goods posted substantial gains (cf. table 3.1). GDP is thus likely to expand substantially in the second
quarter as containment measures are eased.
Table 3.1
real gdp and components
Growth rates on previous period in percent, annualised
2017 2018 2019 2020 2019 2020 2021
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Private consumption 1.2 0.8 1.4 – 4.4 2.6 – 0.2 1.9 – 13.4 – 29.2 53.0 – 5.4 – 12.6
Government consumption 0.6 0.9 0.9 3.6 0.5 2.1 2.5 4.6 4.4 0.7 12.8 4.8
Investment in fixed assets 3.6 0.8 1.2 – 2.2 – 2.4 – 0.5 20.3 – 14.5 – 24.9 34.1 2.2 – 0.9
Construction 1.5 0.0 – 0.5 – 1.0 – 1.0 1.0 1.6 – 0.1 – 18.6 22.2 – 0.9 0.6
Equipment 4.9 1.2 2.2 – 2.9 – 3.2 – 1.4 32.0 – 21.5 – 28.4 41.6 4.1 – 1.7
Domestic final demand 1.8 0.8 1.3 – 2.7 0.8 0.0 7.0 – 11.6 – 24.1 39.2 – 1.0 – 7.1
Change in inventories 1 – 0.3 0.9 – 0.2 – 1.1 – 1.3 2.6 – 8.7 10.3 – 10.1 3.3 – 3.3 5.1
Total exports 2 3.4 5.0 2.1 – 5.2 3.9 2.2 2.8 – 12.8 – 30.8 22.0 16.5 – 2.2
Goods 2 5.3 5.0 4.8 – 0.4 10.3 6.7 4.3 – 7.6 – 21.7 28.0 3.0 6.3
Goods excluding merchanting 2 5.8 4.4 4.9 – 2.8 3.9 6.9 – 3.1 4.5 – 44.3 47.3 14.6 21.2
Services 0.1 5.0 – 3.0 – 15.0 – 8.2 – 6.7 – 0.7 – 23.0 – 48.2 8.1 57.7 – 19.4
Total imports 2 3.8 3.3 2.5 – 8.7 0.4 3.8 – 4.9 – 1.5 – 51.8 46.1 10.4 – 0.5
Goods 2 4.6 6.2 2.8 – 7.3 – 4.2 4.5 – 8.5 – 1.6 – 45.8 55.0 – 0.7 6.8
Services 2.4 – 1.5 2.0 – 11.2 8.9 2.5 1.4 – 1.3 – 60.8 31.1 33.6 – 12.1
Net exports 3 0.3 1.3 0.1 1.0 2.0 – 0.4 3.8 – 6.6 6.1 – 6.6 4.4 – 1.0
GDP 1.6 3.0 1.1 – 2.6 1.5 2.2 1.6 – 6.5 – 24.7 32.2 0.3 – 2.0
1 Contribution to growth in percentage points (including statistical discrepancy).
2 Excluding valuables (non-monetary gold and other precious metals, precious stones and gems as well as works of art and antiques).
3 Contribution to growth in percentage points.
Source(s): SECO
14 Quarterly Bulletin 2 / 2021 JuneLABOUR MARKET Chart 3.4
����-���� ���������� ����
The second wave of the pandemic also left its mark on the
labour market. There are signs of a recovery, however. Index, beginning of period = 100
115
Decline in employment in first quarter
According to the national job statistics (JOBSTAT), the 110
seasonally adjusted number of full-time equivalent
positions dropped in the first quarter. Job losses were 105
recorded in both manufacturing and construction as
100
well as in services (cf. chart 3.4). These statistics measure
employment on the company side and are based on a 95
survey of firms. First-quarter results for the Employment
Statistics (ES), which measure the number of employed 90
persons on the household side, have yet to be published by 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
the Swiss Federal Statistical Office (FSO).
Total Manufacturing
Construction Services
Decline in unemployment …
Source(s): FSO; seasonal adjustment: SNB
In recent months there have been growing signs of
a recovery in the labour market. The number of people
registered as unemployed at the regional employment
Chart 3.5
offices has declined considerably. Excluding seasonal
fluctuations, 140,000 people were registered as ������������ ����
unemployed at the end of May, 18,000 fewer than at the
end of February. Meanwhile, the seasonally adjusted %
unemployment rate published by SECO for the same 5.5
period stood at 3.0%, which was still around half a 5.0
percentage point above its pre-crisis level at the end of 4.5
2019 (cf. chart 3.5). With regard to the unemployment 4.0
3.5
figures in line with the International Labour Organization
3.0
(ILO) definition, no new data have been published since
2.5
the last Quarterly Bulletin.
2.0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
… and in short-time working
Following a renewed rise in the preceding months, short- SECO, seasonally adjusted SECO
time working declined again from February. Provisional ILO, seasonally adjusted ILO
figures from SECO suggest that the number of people SECO: Unemployed persons registered with the regional employment offices, as a
percentage of the labour force (economically active persons).
in short-time work fell by 145,000 to 341,000 between ILO: Unemployment rate based on International Labour Organization definition.
January and March (cf. chart 3.6). Thus, in March, Source(s): SECO, FSO
around 7% of all economically active persons were still
in short-time work.
Chart 3.6
�����-��� �������
Employees affected
In 1,000s
1 400
1 200
1 000
800
600
400
200
0
2017 2018 2019 2020 2021
Source(s): SECO
Quarterly Bulletin 2 / 2021 June 15Chart 3.7
CAPACITY UTILISATION
������ �
Negative output gap in first quarter
%
The output gap, defined as the percentage deviation
2
of actual GDP from estimated aggregate potential output,
0 shows how well production capacity in an economy
is being utilised. In the case of overutilisation the gap is
–2 positive, and in the case of underutilisation it is negative.
–4
The decline in economic activity in the first quarter
–6 caused the output gap to open up again. Potential output as
estimated by means of a production function shows an
–8 output gap of – 3.9% for the first quarter. Other estimatation
methods indicate a narrower gap (cf. chart 3.7).
– 10
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Underutilisation in many industries
Production function HP filter MV filter The surveys conducted among companies confirm that
Source(s): SNB the utilisation of production factors has improved in
many industries. They also show, however, that there are
significant differences between the industries. According
to the KOF survey, although utilisation of technical
Chart 3.8
capacity in manufacturing continued to be below average,
�������� ����������� �� ������������� the situation improved considerably in the first three
months of the year (cf. chart 3.8). Utilisation in construction
% was again slightly above its pre-crisis level in the first
85 quarter (cf. chart 3.9). In many services industries, by
84 contrast, capacity remained underutilised. The hotel
83 industry was particularly affected, with occupancy rates
still very low.
82
81 As regards the labour situation, the majority of companies
80 indicated that their staffing levels were too high in the
79 first quarter. Utilisation is likely to have improved since
March, however, following the easing of containment
78
measures.
77
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Capacity utilisation Long-term average
Source(s): KOF Swiss Economic Institute
Chart 3.9
�������� ����������� �� ������������
%
80
78
76
74
72
70
68
66
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Capacity utilisation Long-term average
Source(s): KOF Swiss Economic Institute
16 Quarterly Bulletin 2 / 2021 JuneChart 3.10
OUTLOOK
������������� ��� ������
The economic outlook for Switzerland has picked up Export-weighted, 27 countries
significantly. With the progress of vaccination Index
programmes and declining infection rates, economic 60
activity can increasingly return to normal. The gradual
easing of health policy measures in recent months 55
has been lending considerable impetus to the economy.
In addition, global manufacturing indicates that foreign 50
demand is solid (cf. chart 3.10). On the whole, there
are signs of strong GDP growth in the second quarter. 45
Economic prospects have improved in most industries. 40
Companies therefore expect the business situation to rally
over the course of the next six months (cf. chart 3.11). 35
Investment activity will likely see an upswing as a result. 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Surveys indicate that the employment outlook is also Source(s): International Monetary Fund – Direction of Trade Statistics (IMF – DOTS),
considerably more positive than it was three months ago Refinitiv Datastream, SNB
(cf. chart 3.12).
Developments going forward hinge on whether there will
Chart 3.11
be renewed waves of the pandemic and which measures
are implemented to contain them. As vaccination ��� ���� � ���� ��
programmes progress, it may be assumed that new waves Average across all KOF surveys
would have a less severe impact than in the past. Index
30
In its baseline scenario for Switzerland, the SNB anticipates
20
a continuation of the economic recovery in the second
half of the year. It is also based on the assumption that the 10
containment measures will be eased further. 0
– 10
For 2021, the SNB anticipates GDP growth of around – 20
3.5%. The main reason for this upward revision compared – 30
with the March forecast is that GDP contracted less
– 40
sharply in the first quarter than expected.
– 50
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Activity looks set to return to its pre-crisis level by
mid-year. However, production capacity will remain Assessment Expected change, next 6 months
underutilised for some time to come. Owing to the Source(s): KOF Swiss Economic Institute
pandemic, the forecast for Switzerland, as for the global
economy, remains subject to heightened uncertainty.
Chart 3.12
������ �� �������
Seasonally adjusted, standardised
3
2
1
0
–1
–2
–3
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
SNB FSO 1 KOF
1 Seasonal adjustment: SNB
Source(s): KOF Swiss Economic Institute, FSO, SNB regional network
Quarterly Bulletin 2 / 2021 June 174 Higher inflation for imported products
Inflation for imported goods and services was likewise
Prices and inflation back in positive territory. After posting a negative rate
of – 1.6% in February, it rose to 1.2% in April and stood at
expectations 1.6% in May.
The increase was largely attributable to the rise in inflation
for oil products, which climbed year-on-year from – 2.3%
in February to 9.4% in March, reaching 20.5% in May.
This upsurge reflects a return of oil prices to roughly their
pre-pandemic levels, having declined sharply at the
In April, the inflation rate as measured by the CPI was beginning of 2020.
back in positive territory for the first time since before
the pandemic. Inflation stood at 0.6% in May, while core Inflation for other imported goods and services, by
inflation reached 0.3%. contrast, remained in the negative range, although it did
rise from – 1.4% in February to – 0.5% in April and May
Short-term inflation expectations increased quarter- (cf. table 4.1). This increase was primarily due to higher
on-quarter, while longer-term expectations were virtually prices for tourism-related services.
unchanged. Both short and longer-term expectations
were within the range consistent with price stability, which
the SNB equates to a rise in the CPI of less than 2%
per year.
CONSUMER PRICES
Annual inflation returns to positive territory
Having remained in negative territory since the outbreak
of the pandemic, annual CPI inflation has been climbing
steadily since December and, in April, was positive again,
at 0.3%, for the first time. In May, annual inflation rose
to 0.6% (cf. chart 4.1, table 4.1).
Table 4.1
swiss consumer price index and components
Year-on-year change in percent
2020 2020 2021 2021
Q2 Q3 Q4 Q1 March April May
Overall CPI – 0.7 – 1.2 – 0.9 – 0.7 – 0.4 – 0.2 0.3 0.6
Domestic goods and services 0.0 – 0.2 – 0.1 0.0 – 0.2 – 0.2 0.1 0.2
Goods 0.0 0.1 0.0 0.1 0.0 – 0.4 – 0.5 – 0.1
Services 0.0 – 0.3 – 0.1 0.0 – 0.2 – 0.1 0.2 0.3
Private services excluding housing rents – 0.4 – 1.0 – 0.5 – 0.2 – 0.6 – 0.4 0.3 0.3
Housing rents 0.9 1.1 0.9 0.5 0.4 0.5 0.5 0.8
Public services – 0.8 – 0.8 – 0.8 – 0.6 – 0.3 – 0.4 – 0.4 – 0.4
Imported goods and services – 2.9 – 4.2 – 3.3 – 2.8 – 1.3 – 0.4 1.2 1.6
Excluding oil products – 1.4 – 2.3 – 1.4 – 1.1 – 1.2 – 1.5 – 0.5 – 0.5
Oil products – 13.7 – 18.6 – 16.8 – 15.3 – 1.3 9.4 16.2 20.5
Source(s): FSO, SNB
18 Quarterly Bulletin 2 / 2021 JuneSlightly higher inflation for domestic products Chart 4.1
Inflation for domestic goods and services has also been ���: �������� ��� �������� ����� ���
back in positive territory since April. It climbed from ��������
– 0.2% in February to 0.1% in April and stood at 0.2% in Year-on-year change in CPI in percent. Contribution of individual
May (cf. chart 4.2). While inflation for domestic goods components, in percentage points.
fell again slightly in March and April, inflation for 1.5
domestic services excluding housing rents rose steadily,
1.0
from – 0.6% in February to 0.1% in May. This increase
was also largely attributable to higher prices for tourism- 0.5
related services. 0.0
– 0.5
Slight rise in rent inflation
– 1.0
Housing rent inflation rose to 0.8% in May, up
0.3 percentage points on February (cf. chart 4.3). – 1.5
2017 2018 2019 2020 2021
Core inflation slightly positive Total Domestic
The FSO core inflation rate 1 (FSO1) increased from – 0.3% Imported, excluding oil products Oil products
in February to 0.2% in May. Core inflation, as measured Source(s): FSO, SNB
by the SNB’s trimmed mean (TM15), rose in the same
period from 0.2% to 0.3% (cf. chart 4.4). The two core
inflation rates were thus in the low positive range in May.
Chart 4.2
Both core inflation rates exclude goods and services with ���: �������� ����� ��� ��������
particularly volatile prices. When calculating FSO1, Year-on-year change in domestic CPI in percent. Contribution of
energy and fuel as well as unprocessed food and seasonal individual components, in percentage points.
goods and services are not included. TM15 excludes
0.8
the goods and services with the most extreme price changes
0.6
every month (i.e. the 15% of goods and services with the
0.4
lowest annual rates of change in prices, and the 15% with
0.2
the highest).
0.0
PRODUCER AND IMPORT PRICES – 0.2
– 0.4
Higher inflation for producer and import prices – 0.6
Inflation for producer and import prices rose substantially – 0.8
in recent months and stood at 3.2% in May, compared to 2017 2018 2019 2020 2021
– 1.1% in February (cf. chart 4.5). This increase is primarily Total domestic goods and services Goods
a reflection of the considerable hike in import prices, Services, excluding housing rents Housing rents
which in May were up 6.4% year-on-year. Producer prices Source(s): FSO, SNB
also recorded an increase. However, at 1.6%, the rise was
less pronounced than its counterpart. The rise in inflation
for producer and import prices was broad based. The Chart 4.3
biggest contribution to this increase, however, came from
oil products and intermediate goods (e.g. metal, timber, ������� � ���
plastic). Supply bottlenecks are likely to have played an %
important role here.
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
2017 2018 2019 2020 2021
Housing rents (year-on-year change)
Reference mortgage rate
Source(s): Federal Office for Housing (FOH), FSO
Quarterly Bulletin 2 / 2021 June 19Chart 4.4 INFLATION EXPECTATIONS
���� ��������� �����
Year-on-year change Short-term inflation expectations slightly higher again
In the wake of the rise in annual inflation, short-term
%
inflation expectations increased again slightly compared
1.5
with the previous quarter.
1.0
According to the joint monthly financial market survey
0.5
by Credit Suisse and the CFA Society Switzerland, 58% of
0.0 analysts questioned in May 2021 continued to expect
inflation rates to rise in the next six months (cf. chart 4.6).
– 0.5 Meanwhile, 36% of respondents anticipated unchanged
– 1.0 rates, and fewer than 6% thought rates would fall. It
is likely that survey participants would have known that
– 1.5 the annual CPI inflation rate in spring had returned
2017 2018 2019 2020 2021 to positive territory. The survey results thus suggest that
CPI TM15 FSO1 respondents also expect annual inflation rates to remain
Source(s): FSO, SNB
positive in the months ahead.
The survey of households conducted by SECO in April
paints a similar picture. With a share of 54%, the majority
Chart 4.5
of households were still expecting prices to rise in the next
�������� ��� ������ ������ twelve months, while 41% of households were expecting
Year-on-year change unchanged prices. The share of respondents anticipating
%
a fall in prices, by contrast, fell from 10% in January to 4%.
10
In the talks conducted by the SNB’s delegates for regional
economic relations, companies also expected higher
5 inflation in the short term (cf. chart 10 in ‘Business cycle
signals’). In the second quarter of 2021, company
0 representatives anticipated an annual inflation rate of
1.1% for the next six to twelve months. In the preceding
–5
quarter, they had put the rate at 0.3%.
Longer-term expectations consistent with price stability
– 10 Medium and longer-term inflation expectations changed
2017 2018 2019 2020 2021 little, however, and remained within the range consistent
Total Producer prices Import prices with price stability, which the SNB equates to a rise in the
Source(s): FSO CPI of less than 2% per year.
Company representatives interviewed by the SNB’s
Chart 4.6 delegates in Q2 of 2021 thus put the average inflation rate in
three to five years at approximately 1.2% (Q1 2021: 1.1%).
��-��� ������: ���-����� ���������
������������
Proportion of respondents in %
100
80
60
40
20
0
2017 2018 2019 2020 2021
Decrease No change Increase
Source(s): CFA Society Switzerland, Credit Suisse
20 Quarterly Bulletin 2 / 2021 June5 No liquidity provision in CHF, less in USD
In the last quarter, the secured short-term money market
Monetary developments rates remained consistently close to the SNB policy rate. It
was therefore not necessary to provide the money market
with Swiss franc liquidity through open market operations.
In view of the sustained improvements in US dollar funding
At its quarterly assessment of 25 March 2021, the SNB conditions, the Bank of England, the Bank of Japan, the
reaffirmed its expansionary monetary policy. It kept European Central Bank and the Swiss National Bank, in
the SNB policy rate and interest on sight deposits at the consultation with the Federal Reserve, jointly decided to
SNB at – 0.75%, and in light of the highly valued Swiss discontinue offering dollar liquidity at the 84-day maturity
franc it remained willing to intervene in the foreign from July 2021. Operations with a 7-day maturity will
exchange market as necessary. It also continued to supply continue to be held on a weekly basis, however.
the banking system with liquidity on generous terms.
Higher sight deposits at the SNB
In the period following the March monetary policy Since the monetary policy assessment of March 2021,
assessment, share prices and yields on long-term total sight deposits held at the SNB have increased. In the
Confederation bonds rose further. By mid-June, the week ending 11 June 2021 (last calendar week before
Swiss franc was significantly stronger against the the assessment of June 2021), they amounted to CHF 711
US dollar and had also gained against the euro. billion. This was higher than in the last calendar week
preceding the mid-March assessment (CHF 702.9 billion).
Growth rates for the broad monetary aggregates weakened Between the assessments of March and June 2021, sight
owing to base effects. Annual growth in bank lending deposits at the SNB averaged CHF 706 billion. Of this
remained robust in Q1 2021, and there were still no amount, CHF 631.9 billion were sight deposits of domestic
discernible signs of credit rationing. banks and the remaining CHF 74.1 billion were other
sight deposits.
SUMMARY OF MONETARY POLICY SINCE
THE LAST ASSESSMENT Statutory minimum reserves averaged CHF 21.4 billion
between 20 February and 19 May 2021. Overall, banks
Expansionary monetary policy remains unchanged exceeded the minimum reserve requirement by some
At its quarterly assessment of 25 March 2021, the SNB CHF 616.9 billion (previous period: CHF 621.6 billion).
confirmed its expansionary monetary policy stance. The Banks’ excess reserves thus remain very high.
environment continued to be affected by the coronavirus
pandemic. Against this backdrop, the SNB left unchanged,
at – 0.75%, the SNB policy rate and the interest rate
on sight deposits held by banks and other financial market
participants at the SNB which exceed a given threshold.
Furthermore, the SNB confirmed its willingness to intervene
as necessary in the foreign exchange market to contribute
to the stabilisation of the situation. In so doing, it continued
to take the overall exchange rate situation into account.
Moreover, it continued to provide the banking system with
liquidity on generous terms and thus supported the supply
of credit to the economy at favourable conditions.
Quarterly Bulletin 2 / 2021 June 21Chart 5.1 MONEY AND CAPITAL MARKET INTEREST RATES
��� ����� ���� ��� ���� ������ �����
Money market rates largely unchanged
% Money market interest rates have consistently tracked
– 0.55 close to the SNB policy rate of – 0.75% in the three months
– 0.60 since the last monetary policy assessment. Over the
entire period, SARON had stood at around – 0.73%, while
– 0.65 the three-month Libor, which had served as the SNB’s
– 0.70 monetary policy reference rate up until June 2019, was at
– 0.75% (cf. chart 5.1). The setting of CHF Libor rates
– 0.75
will cease as per end-2021.
– 0.80
– 0.85
Slight increase in capital market rates
Long-term capital market rates continued to rise in the
– 0.90 second quarter of 2021. The yield on ten-year Confederation
2017 2018 2019 2020 2021 bonds stood at – 0.20% in mid-June. It was thus around
SNB policy rate SARON 3M Libor 0.3 percentage points higher than at the beginning of the
Source(s): Bloomberg, SIX Swiss Exchange Ltd, SNB
year (cf. chart 5.2). The increase was largely consistent
with movements in corresponding rates in Germany and
reflects, among other things, the improving economic
outlook linked to global vaccination programmes. As the
Chart 5.2
long-term nominal interest rates are also driven by
��-���� ����� ������������� ���� ����� expected inflation over the interest rate term, the upward
revision of the short-term inflation outlook is also likely
% to have contributed to the rise in long-term interest rates.
0.4
0.2 Steeper yield curve
The yield curve for Confederation bonds was somewhat
0.0
steeper in mid-June than at the time of the last monetary
– 0.2 policy assessment in March 2021 (cf. chart 5.3). Yields for
– 0.4
maturities in excess of 15 years returned to positive
territory, after the yield curve across all maturities covered
– 0.6 had been negative for the last two years.
– 0.8
Real interest rates low
– 1.0
Real interest rates – the difference between nominal interest
– 1.2 rates and inflation expectations – are an important factor
2017 2018 2019 2020 2021 in the saving and investment decisions of companies and
Source(s): SNB households.
Real interest rates persisted at low levels. This was
Chart 5.3 attributable to the fact that although nominal yields on
Confederation bonds registered a slight rise since the
���� ��������� �� ������������� ����� last monetary policy assessment, survey measures of
Years to maturity (horizontal axis); Nelson-Siegel-Svensson method short-term inflation expectations were somewhat more
% clearly in positive territory than in Q1.
0.2
0.0
– 0.2
– 0.4
– 0.6
– 0.8
– 1.0
0 5 10 15 20
Mid-June 2021 Mid-March 2021
Mid-December 2020
Source(s): SNB
22 Quarterly Bulletin 2 / 2021 JuneEXCHANGE RATES Chart 5.4
�������� �����
Swiss franc stronger against US dollar
Since the monetary policy assessment in March, the 1.15
Swiss franc has gained in value against the US dollar by
4% (cf. chart 5.4). This development reflected broad-based 1.10
dollar weakness, driven in part by a rise in US inflation
expectations coupled with an unchanged expansionary 1.05
monetary policy. One US dollar was worth CHF 0.90, the
1.00
lowest it has been since February.
0.95
The Swiss franc appreciated by 1.5% against the euro.
In mid-June, the euro was trading at CHF 1.09 to the franc. 0.90
Swiss franc’s trade-weighted external value stronger 0.85
The nominal trade-weighted external value of the Swiss Jan 21 Feb Mar Apr May Jun
franc has increased by around 2% since the monetary USD in CHF EUR in CHF
policy assessment in March (cf. chart 5.5). The Swiss Source(s): SNB
franc gained in value across a broad front. In addition to
the aforementioned appreciation against the euro (1%,
index weighting 43%) and the US dollar (4%, index
Chart 5.5
weighting 15%), the appreciation in particular against
the renminbi (2%, index weighting 9%) and the yen ������� �������� ����� �� ����� �����
(just under 5%, index weighting 3%) also contributed
to the strength of the Swiss franc’s trade-weighted Index, March 2021 monetary policy assessment = 100
external value. 104
Real external value still high 103
Following the Swiss franc’s nominal depreciation in
February and early March, the real external value also 102
declined considerably in the first quarter; it rose again
with the franc’s renewed appreciation in nominal terms
101
in April and May (cf. chart 5.6). In a longer-term
comparison, the Swiss franc remains highly valued.
100
99
Jan 21 Feb Mar Apr May Jun
Source(s): SNB
Chart 5.6
���� �������� ����� �� ����� �����
Index, December 2000 = 100
130
120
110
100
90
07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
Source(s): SNB
Quarterly Bulletin 2 / 2021 June 23Chart 5.7 SHARE AND REAL ESTATE PRICES
����� ������ ��� ����������
Share prices reach new all-time highs
Index % Since the last monetary policy assessment in March, share
12 000 25 prices have increased further in the major economies. At
the same time, concerns over central banks possibly taking
restrictive action in response to rising inflation contributed
11 500 20 to share prices falling somewhat in the second half of
April. As concerns eased, however, global share prices
continued their upward trend. In June, the Swiss Market
Index (SMI) reached a new all-time high; by mid-month,
11 000 15
it was up about 8% on its end-March level (cf. chart 5.7).
Lower market uncertainty
10 500 10 The volatility index derived from options on SMI futures
Jan 21 Feb Mar Apr May Jun contracts is an indicator of how investors gauge uncertainty
SMI Volatility Index on the SMI (rhs) on the stock market (cf. chart 5.7). The index fell
Source(s): Bloomberg, Refinitiv Datastream
significantly in the period from the last monetary policy
assessment up to mid-April. Subsequent uncertainty
about the future path of inflation and its impact on the
financial markets resulted in a temporary rise in the
Chart 5.8
index. It declined again in May, however.
�������� ��� �������
Substantial gains for most sector indices
Index, 1 January 2021 = 100
Chart 5.8 shows the movements of important sector
125 indices in the broad-based Swiss Performance Index (SPI).
120 Compared with the last monetary policy assessment,
115
share prices of consumer goods companies, industrials and
healthcare companies rose considerably, while share
110
prices of financial service providers recorded little change.
105
100 Continued growth in residential real estate prices
In the first quarter of 2021, transaction prices for residential
95
real estate rose further (cf. chart 5.9), with the exception
90 of prices in the apartment buildings segment, which
Jan 21 Feb Mar Apr May Jun stagnated. All in all, the residential real estate market does
Healthcare Consumer goods not seem to be negatively affected by the coronavirus
Financials Industrials pandemic thus far. However, it is not possible to rule out
Source(s): Refinitiv Datastream the pandemic having an unfavourable effect on this
market in the future.
Chart 5.9
������� ����������� ������
Nominal (hedonic)
Index, beginning of period = 100
140
130
120
110
100
90
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Privately owned apartments (FPRE, IAZI, WP; average)
Single-family houses (FPRE, IAZI, WP; average)
Apartment buildings (WP)
Source(s): Fahrländer Partner Raumentwicklung (FPRE), IAZI, Wüest Partner (WP)
24 Quarterly Bulletin 2 / 2021 JuneMONETARY AND CREDIT AGGREGATES Chart 5.10
������� ����
Stable monetary base
The monetary base, which consists of banknotes in In CHF billions
circulation and sight deposits of domestic banks held at 800
the SNB, has remained roughly at the level recorded
since August 2020. In May 2021, it averaged CHF 722.4 600
billion (cf. chart 5.10), and was thus down CHF 7.0
billion on February. 400
Weaker growth in broad monetary aggregates
200
Growth rates for broad monetary aggregates have declined
in recent months. In May 2021, the M1 aggregate (currency
in circulation, as well as sight deposits and transaction 0
accounts of resident bank customers) was up 6.5% year- 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
on-year (cf. table 5.1). In the same period, M2 (M1 plus Monetary base Banknotes in circulation
savings deposits) grew by 4.4% and M3 (M2 plus time Sight deposits
deposits) was up by 4.1%, compared with annual growth Source(s): SNB
rates of 6.8% for both aggregates in February. The lower
annual rates of growth reflect a base effect, attributable
to the fact that money creation resulting from the granting
Chart 5.11
of COVID-19 loans had been particularly pronounced
at the beginning of the pandemic last year. �������� ������ ��� ����� �����
In CHF billions In CHF billions
Stronger growth in bank lending
Bank lending (by domestic bank offices, in all currencies) 1 100 120
was up 4.0% year-on-year in the first quarter of 2021, 1 050 110
having risen by 3.5% in the fourth quarter of 2020
(cf. table 5.1). Both mortgage lending and other loans 1 000 100
contributed to the increase in growth. 950 90
Banks’ mortgage claims, which make up roughly 85% 900 80
of all bank lending to domestic customers, were up 3.3% 850 70
year-on-year in the first quarter of 2021. Demand for
mortgages continued to be supported by low mortgage 800 60
interest rates. The ten-year mortgage interest rate stood 12 13 14 15 16 17 18 19 20 21
at around 1.4% in April 2021, which was only slightly Mortgage claims Other loans, secured (rhs)
above the all-time low of approximately 1.2% recorded Other loans, unsecured (rhs)
in August 2019. Source(s): SNB
Other loans are considerably more volatile than mortgage
loans (cf. chart 5.11). While unsecured other loans have Chart 5.12
changed little since the beginning of 2021, the volume
of secured other loans saw an increase. This is largely ����� �� ���������� ��� ���������
attributable to a rise in foreign currency lending. In CHF billions
1 000
800
600
400
200
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Households
Private companies, excluding financial sector
Private companies in financial sector
Source(s): SNB
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