Quarterly Bulletin 2 / 2022 June - Swiss National Bank (SNB)
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Quarterly Bulletin 2 / 2022 June
Quarterly Bulletin 2 / 2022 June Volume 40
Contents
Page
Monetary policy report 4
1 Monetary policy decision of 16 June 2022 6
Monetary policy strategy at the SNB 7
2 Global economic environment 8
3 Economic developments in Switzerland 14
4 Prices and inflation expectations 19
5 Monetary developments 22
Business cycle signals 28
Chronicle of monetary events 36
Glossary38
Quarterly Bulletin 2 / 2022 June 3Monetary policy report
Report for the attention of the Governing Board of the Swiss
National Bank for its quarterly assessment of June 2022
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 16 June 2022’) is an excerpt from
the press release published following the assessment.
This report is based on the data and information available as at
16 June 2022. Unless otherwise stated, all rates of change
from the previous period are based on seasonally adjusted data
and are annualised.
Quarterly Bulletin 2 / 2022 JuneKey points
• O
n 16 June 2022, the SNB decided to tighten its monetary
policy. It raised the SNB policy rate by half a percentage
point to – 0.25% to counter increased inflationary pressure.
The conditional inflation forecast was above that of March,
and would have been even higher without the rise in the
policy rate.
• G
lobal economic growth slowed from the beginning of 2022
onwards, and inflation rose further in many countries. In its
baseline scenario, the SNB anticipates the positive economic
development continuing overall. Inflation is likely to remain
high for some time, but the SNB’s assumption is that it will
return to more moderate levels over the medium term.
• T
he Swiss economy continued its favourable development.
The SNB still expects GDP growth of around 2.5% for 2022.
The level of uncertainty associated with the forecast remains
high.
• A
nnual CPI inflation continued to rise, and stood at 2.9% in
May. The longer-term inflation expectations derived from the
surveys were somewhat higher than in the previous quarter,
but still within the range compatible with price stability.
• T
he Swiss franc depreciated in trade-weighted terms.
There was an increase in long-term interest rates, whereas
share prices fell. Real estate prices rose. Growth in
monetary aggregates slowed further. There was scarcely
any change in lending growth.
Quarterly Bulletin 2 / 2022 June 51 1.9% for 2023, and 1.6% for 2024 (cf. table 1.1). Without
today’s SNB policy rate increase, the inflation forecast
Monetary policy decision would be significantly higher.
of 16 June 2022 Global economic growth has slowed markedly recently.
This slowdown is on the one hand attributable to the
high level of inflation, which is weighing on purchasing
power and thus reducing demand. On the other hand,
the uncertainty stemming from the war in Ukraine as well
as the coronavirus lockdowns in China are curbing the
development of the global economy.
Swiss National Bank tightens monetary policy
and raises SNB policy rate to – 0.25% Since March, there has been a further considerable and
The SNB is tightening its monetary policy and is raising broad-based increase in inflation in many countries.
the SNB policy rate and the interest rate on sight deposits The war in Ukraine has been a significant factor here, too,
at the SNB by half a percentage point to – 0.25% to counter in that the prices of many commodities have risen as a
increased inflationary pressure. The tighter monetary result. In addition, persisting supply bottlenecks have led
policy is aimed at preventing inflation from spreading to further price increases for various goods.
more broadly to goods and services in Switzerland.
It cannot be ruled out that further increases in the SNB In its baseline scenario for the global economy, the SNB
policy rate will be necessary in the foreseeable future assumes that energy prices will remain high for the time
to stabilise inflation in the range consistent with price being, but that there will not be an acute energy shortage in
stability over the medium term. To ensure appropriate the major economic areas. The positive development
monetary conditions, the SNB is also willing to be active of the economy should thus continue overall. Owing to the
in the foreign exchange market as necessary. increased prices for energy and food, coupled with the
supply bottlenecks, inflation is likely to remain high for
The SNB policy rate change applies from 17 June 2022. some time. However, the importance of these factors
With effect from 1 July 2022, the SNB is also adjusting the should diminish over the medium term. With monetary
threshold factor used to calculate the level of banks’ policy also becoming increasingly tighter in many
sight deposits at the SNB exempt from negative interest. countries, inflation is likely to gradually return to more
The factor will be lowered from 30 to 28. This will ensure moderate levels.
that the secured short-term Swiss franc money market
rates are close to the SNB policy rate. This scenario for the global economy is subject to
significant risks. For example, inflation could rise further
Inflation reached 2.9% in May and is likely to remain at and thus weigh even more heavily on real incomes and
an elevated level for the time being. The SNB’s new consumer demand. At the same time, high inflation could
conditional inflation forecast is based on the assumption become entrenched as a result of increased second-round
that the SNB policy rate is – 0.25% over the entire forecast effects, requiring stronger monetary policy responses in
horizon. The new forecast for the next three years is above other countries. Finally, there are still important downside
that of March (cf. chart 1.1), and stands at 2.8% for 2022, risks to growth from the war in Ukraine and the pandemic.
Chart 1.1
����������� ��������� �������� �� ���� ����
Year-on-year change in Swiss consumer price index in percent
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
– 0.5
– 1.0
– 1.5
2019 2020 2021 2022 2023 2024 2025
Inflation Forecast June 2022, Forecast March 2022,
SNB policy rate –0.25% SNB policy rate –0.75%
Source(s): SFSO, SNB
6 Quarterly Bulletin 2 / 2022 JuneThe Swiss economy has continued the favourable assumption that the global economy continues to grow and
development it has shown since the beginning of the year. that the war in Ukraine does not escalate further.
After modest growth in the fourth quarter of 2021,
GDP increased by just under 2% in the first quarter of this The forecast for Switzerland, as for the global economy,
year. The signals remain positive for the current quarter. is subject to large risks. If the energy supply in Europe
The situation on the labour market has also continued to were to be adversely affected, this could have a serious
improve. impact on the Swiss economy. The global supply
bottlenecks and further increases in commodity prices
The war in Ukraine has thus far had comparatively little could also slow growth. Furthermore, a resurgence of
adverse impact on economic activity in Switzerland. the coronavirus pandemic cannot be ruled out.
The effect has been most clearly felt in the higher energy
prices and in the supply bottlenecks. Mortgage lending and residential property prices have
risen further in recent quarters. The SNB will continue
For 2022, the SNB still anticipates GDP growth of around to monitor developments on the mortgage and real estate
2.5%. Unemployment is likely to remain low. This markets closely.
favourable forecast is based, among other things, on the
Monetary policy strategy at the SNB inflation to fluctuate somewhat with the economic
The SNB has a statutory mandate to ensure price stability cycle. Second, the SNB summarises its assessment of
while taking due account of economic developments. the situation and of the need for monetary policy action
in a quarterly inflation forecast. This forecast, which
The SNB has specified the way in which it exercises this is based on the assumption of a constant short-term
mandate in a three-part monetary policy strategy. First, interest rate, shows how the SNB expects the CPI
it regards prices as stable when the Swiss consumer to move over the next three years. As the third element
price index (CPI) rises by less than 2% per annum. This in implementing its monetary policy the SNB sets the
allows it to take account of the fact that the CPI slightly SNB policy rate, and seeks to keep the secured short-
overstates actual inflation. At the same time, it allows term Swiss franc money market rates close to this rate.
Table 1.1
OBSERVED INFLATION IN JUNE 2022
2019 2020 2021 2022 2019 2020 2021
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Inflation 0.6 0.6 0.3 −0.1 −0.1 −1.2 −0.9 −0.7 −0.4 0.5 0.8 1.4 2.1 0.4 −0.7 0.6
Source(s): SFSO
CONDITIONAL INFLATION FORECAST OF JUNE 2022
2022 2023 2024 2025 2022 2023 2024
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Forecast March 2022,
SNB policy rate −0.75% 2.2 2.2 2.1 1.8 1.2 0.8 0.7 0.7 0.8 0.9 1.0 1.1 2.1 0.9 0.9
Forecast June 2022,
SNB policy rate −0.25% 2.9 3.2 3.0 2.8 1.9 1.5 1.4 1.4 1.5 1.7 1.9 2.1 2.8 1.9 1.6
Source(s): SNB
Quarterly Bulletin 2 / 2022 June 7Chart 2.1 2
����� ���� �����
Average of depicted period = 100
Global economic
Index environment
120
115
110
105
100
95
Growth in the global economy has slowed markedly
90
since the beginning of the year. Its development was
85
initially adversely affected by a further wave of the
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
coronavirus pandemic and the temporary tightening of
World Advanced economies containment measures in some countries. The high
Emerging economies level of inflation also had a curbing effect, weighing on
Source(s): CPB Netherlands Bureau for Economic Policy Analysis, Refinitiv purchasing power and reducing demand, and so, too,
Datastream
did the uncertainty among households and companies
stemming from the war in Ukraine. Global trade expanded
further in the first quarter nonetheless (cf. chart 2.1).
Furthermore, unemployment continued to decline in many
countries, and in the advanced economies is now back
around the low levels seen prior to the pandemic
(cf. chart 2.9).
There was a broad-based increase in inflation in many
countries. The war in Ukraine was a significant factor
here, too, in that the prices of many commodities rose as
a result. In addition, persisting supply bottlenecks
led to further price increases for various goods.
In its baseline scenario for the global economy, the SNB
assumes that energy prices will remain high for the time
being, but that there will not be an acute energy shortage in
the major economic areas. The positive development
of the economy should thus continue overall. Owing to the
increased prices for energy and food, coupled with the
supply bottlenecks, inflation is likely to remain high for
some time. However, the importance of these factors
should diminish over the medium term. With monetary
Table 2.1
BASELINE SCENARIO FOR GLOBAL ECONOMIC DEVELOPMENTS
Scenario
2018 2019 2020 2021 2022 2023
GDP, year-on-year change in percent
Global 1 3.6 2.9 −3.1 6.1 2.5 2.6
US 2.9 2.3 −3.4 5.7 2.6 1.4
Euro area 1.8 1.6 −6.5 5.3 2.8 1.9
Japan 0.6 −0.2 −4.6 1.7 2.0 2.4
China 2 6.7 5.9 1.7 8.5 4.1 6.2
Oil price in USD per barrel 71.0 64.3 41.8 70.7 106.0 108.0
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
8 Quarterly Bulletin 2 / 2022 Junepolicy also becoming increasingly tighter in many Chart 2.2
countries, inflation is likely to gradually return to more
����� �������
moderate levels.
Index %
This scenario for the global economy is subject to 160 100
significant risks. For example, inflation could rise further
and thus weigh even more heavily on real incomes and 140 80
consumer demand. At the same time, high inflation could
become entrenched as a result of increased second-round 120 60
effects, requiring stronger monetary policy responses in
100 40
other countries. Finally, there are still important downside
risks to growth from the war in Ukraine and the pandemic. 80 20
The SNB’s forecasts for the global economy are based on 60 0
assumptions about oil prices and the EUR/USD exchange 2018 2019 2020 2021 2022
rate. The SNB is assuming an oil price for Brent crude
MSCI World (lhs; beginning of period = 100)
of USD 108 per barrel, compared with USD 98 in the last Implied volatility (VIX) (rhs)
baseline scenario, and an exchange rate of USD 1.06 to
Source(s): Refinitiv Datastream
the euro compared with USD 1.13 previously. Both
correspond to the 20-day average when the current
baseline scenario was drawn up.
Chart 2.3
INTERNATIONAL FINANCIAL AND ������������� ����-���� �������� �����
COMMODITY MARKETS 10-year government instruments
%
Financial market sentiment has remained volatile since the
4
monetary policy assessment in March. Key influencing
factors were the war in Ukraine as well as mounting fears 3
of inflation, which fuelled expectations of a faster
tightening of monetary policy and, in turn, concerns 2
about the economy.
1
Global stock markets declined further. In mid-June, the
MSCI World Index was back near the level recorded at the 0
beginning of last year. This was primarily due to a rise
–1
in long-term interest rates in many countries as well as to
2018 2019 2020 2021 2022
weaker expectations for the global economy, but was
to some extent also a result of the lockdowns imposed in US Japan Germany
China as part of its zero-COVID strategy. At the same Source(s): Refinitiv Datastream
time, the implied volatility of stocks as measured by option
prices – e.g. the VIX index in the US – saw a renewed
increase (cf. chart 2.2). Chart 2.4
Yields on ten-year government bonds in most advanced �������� ����-���� �������� �����
economies continued to climb strongly (cf. charts 2.3 10-year government instruments
and 2.4). This was in response to rising inflation and the %
associated – or prospective – tightening of monetary 5
policy.
4
Activity on the foreign exchange markets was dominated 3
by concerns over the economic impact of the war in 2
Ukraine as well as the growing divergence of monetary
policy stances in advanced economies. Highly sought 1
after, the US dollar appreciated on a trade-weighted basis. 0
The euro trended sideways in trade-weighted terms,
–1
falling to a five-year low against the dollar. The yen and
2018 2019 2020 2021 2022
pound sterling weakened in trade-weighted terms,
with the yen dropping to a twenty-year low against the Germany France Italy
US dollar (cf. chart 2.5). Spain Portugal
Source(s): Refinitiv Datastream
Quarterly Bulletin 2 / 2022 June 9Chart 2.5 Commodity prices were affected by the war in Ukraine
and the sanctions imposed. In the period under review, the
�������� ����� price of Brent crude hovered around USD 110 per barrel,
Trade-weighted
thus remaining considerably higher than at the beginning
Index, beginning of period = 100 of the year (cf. chart 2.6).
120
115 UNITED STATES
110
In the US, GDP fell by 1.5% in the first quarter, following
105 robust growth in the previous quarter (cf. chart 2.7).
100 The decline primarily reflected weak growth in exports.
Furthermore, economic activity was again impaired
95
somewhat by a further pandemic wave. The employment
90 market continues to suggest that production capacity is
85 well utilised. However, employment figures were still
2018 2019 2020 2021 2022 below pre-pandemic levels, which can be attributed to
lower labour market participation. At 3.6% in May,
USD JPY EUR GBP
the unemployment rate was back near its pre-crisis level
Source(s): Refinitiv Datastream
(cf. chart 2.9). The good capacity utilisation is also
reflected in above-average wage growth.
Chart 2.6
In the quarters ahead, the US economy is likely to recover
�������� ������ further from the pandemic and grow at an above-average
rate. However, with the current high inflation putting
Index, beginning of period = 100 USD/barrel pressure on real incomes and dampening consumer
200 140 confidence, the outlook for consumption has deteriorated
180 120 somewhat. This is compounded by a less expansionary
160 100
monetary and fiscal policy. The SNB is therefore revising
its growth forecast for the US downwards, to 2.6% for
140 80
2022 and 1.4% for 2023 (cf. table 2.1).
120 60
100 40 Consumer price inflation increased further and stood at
8.6% in May (cf. chart 2.10). Comparable inflation
80 20
rates were last seen in the 1980s. The current elevated level
60 0 of inflation is partly attributable to higher prices for energy
2018 2019 2020 2021 2022 and food, which were pushed up further as a result of
Commodities Industrial metals the war in Ukraine. Supply chain issues and good capacity
Oil: Brent (rhs) utilisation levels also contributed to recent inflation
Source(s): Refinitiv Datastream developments. Core inflation stood at 6.0% in May
(cf. chart 2.11). Inflation as measured by the personal
consumption expenditure deflator − the index used by
Chart 2.7 the US Federal Reserve to set its 2% inflation target −
stood at 6.3% in April.
���� ��
Index, Q4 2019 = 100
Against this background, the Fed increased its target range
for the federal funds rate in May by 50 basis points and
115
in June by a further 75, to 1.5 – 1.75% (cf. chart 2.12). It also
110 signalled additional interest rate hikes this year in order
to curb inflation. Furthermore, in June, it commenced the
105 gradual reduction of its balance sheet.
100
95
90
85
2018 2019 2020 2021 2022
US Japan Euro area China
Source(s): Refinitiv Datastream
10 Quarterly Bulletin 2 / 2022 JuneEURO AREA Chart 2.8
���������� ��������’ �������
In the euro area, GDP expanded by 2.5% in the first quarter (�������������)
(cf. chart 2.7). Exports continued to recover and inventory
levels increased substantially. Private consumption, Index
by contrast, declined again as a result of the tightening 65
of containment measures at the beginning of the year. 60
Employment figures in the euro area climbed further;
55
unemployment, at 6.8% in April, was lower than its
pre-pandemic level (cf. chart 2.9). 50
45
Activity in the services sector picked up appreciably 40
following the lifting of containment measures. However,
the war in Ukraine is likely to have a lasting impact on 35
future economic development. Consumer sentiment has 30
deteriorated considerably since the war began, particularly 2018 2019 2020 2021 2022
also as higher energy and food prices are weighing on US Japan Euro area China
households’ real incomes. Furthermore, the war has led to
Source(s): Institute for Supply Management (ISM), Markit Economics Limited
additional supply bottlenecks in manufacturing. Overall,
therefore, economic development in the quarters ahead is
likely to be less vigorous than previously assumed.
Chart 2.9
The SNB now expects growth in the euro area of 2.8%
for 2022 and 1.9% for 2023 (cf. table 2.1). ������������ �����
Consumer price inflation in the euro area advanced further %
in recent months and stood at 8.1% in May (cf. chart 2.10). 16
This was primarily driven by energy and food prices, 14
which increased substantially with the outbreak of the war
12
in Ukraine. Core inflation also rose and latterly stood
at 3.8% (cf. chart 2.11), reflecting both higher prices for 10
services and price increases for various goods on the 8
back of ongoing supply bottlenecks in manufacturing.
6
In June, the European Central Bank decided to end net 4
asset purchases under its asset purchase programme (APP)
2
as of 1 July. It announced its intention to raise its key
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
interest rates by 25 basis points in mid-July and held out
the prospect of a further, possibly larger rate rise in US Japan Euro area
September. Furthermore, it signalled that additional Source(s): Refinitiv Datastream
measures could follow.
Chart 2.10
�������� ������
Year-on-year change
%
10
8
6
4
2
0
–2
2018 2019 2020 2021 2022
US Japan Euro area China
Source(s): Refinitiv Datastream
Quarterly Bulletin 2 / 2022 June 11Chart 2.11 JAPAN
���� ��������� �����
GDP in Japan contracted by 0.5% in the first quarter, thus
Year-on-year change
remaining below its pre-crisis level (cf. chart 2.7).
% A further pandemic wave as well as the state of emergency
8 declared in numerous prefectures at the beginning of
the year again hampered private consumption and activity
6
in the services sector. Manufacturing activity, by contrast,
4 gained some strength, benefiting from robust demand
from abroad. To date, employment figures and labour
2 market participation have remained lower than before the
0
pandemic, and the unemployment rate stood at 2.5% in
April, still slightly above its pre-crisis level (cf. chart 2.9).
–2
2018 2019 2020 2021 2022 After emergency measures were lifted in March, private
US Japan Euro area China
consumption picked up again and the business situation
in the services sector improved. In manufacturing,
1 Excluding food and energy
on the other hand, growth recently lost momentum amid
Source(s): Refinitiv Datastream
a weakening of foreign demand. Moreover, higher
commodity prices and ongoing procurement problems
in the automotive industry have also been having
Chart 2.12
a dampening effect. Nevertheless, with the anticipated
�������� �������� ����� recovery in private consumption, economic activity
is likely to grow again above potential in the further course
% of the year. The SNB expects GDP growth for Japan of
3.0 2.0% for 2022 and 2.4% for 2023 (cf. table 2.1).
2.5
2.0 Driven by higher energy and food prices, consumer price
1.5 inflation continued to rise in recent months and, at 2.4%
1.0 in April, exceeded the Bank of Japan’s long-term target
0.5 (cf. chart 2.10). With the fading effect of last year’s cuts in
0.0 mobile communication charges, core inflation moved
– 0.5 back into positive territory; however, at 0.1%, it remained
2018 2019 2020 2021 2022 very modest (cf. chart 2.11).
US 1 Japan 2
Euro area 3 China 4
The Bank of Japan considers the inflation trend resulting
from higher import prices to be temporary and expects
1 Federal funds rate (upper limit of target range) 2 Call money target rate
3 Deposit facility rate 4 Reverse repo rate (7-day) inflation to return to well below 2% next year. Against this
Source(s): Refinitiv Datastream backdrop, it left its targets under the yield curve control
programme unchanged.
12 Quarterly Bulletin 2 / 2022 JuneCHINA providing financial relief to companies and households. It
also decided to grant targeted tax relief, particularly to
In China, first-quarter economic activity remained solid businesses. The SNB has lowered its 2022 growth forecast
overall (cf. chart 2.7). Manufacturing recorded robust for China to 4.1%. For 2023, it expects GDP growth of
growth, while services lost momentum amid a pandemic 6.2% (cf. table 2.1).
wave that began to spread in March.
Consumer price inflation rose to 2.1% in May, while
Major cities such as Shanghai entered into renewed core inflation remained virtually unchanged at 0.9%
lockdowns in the wake of the zero-COVID strategy pursued (cf. charts 2.10 and 2.11).
by Chinese authorities. Associated supply bottlenecks
and mobility constraints led to a broad-based decline in Although the People’s Bank of China left official interest
economic activity in March and April, as well as to an rates unchanged (cf. chart 2.12), it lowered the minimum
increase in the urban unemployment rate. The economy reserve rates for banks in April. Furthermore, authorities
recovered again slightly in May, as the pandemic situation decided in recent months to implement further measures
eased and lockdowns were partially relaxed. aimed at supporting the real estate market.
GDP is likely to contract in the second quarter due to the
lockdowns, but should pick up again thereafter. However,
foreign demand is expected to provide less support than
in previous quarters, and the deleveraging in the real estate
sector is likely to weigh on economic activity for some
time yet. To boost the economy, the government intends to
continue prioritising infrastructure investment and
Quarterly Bulletin 2 / 2022 June 13Chart 3.1 3
���� �� Economic developments
% Index, Q4 2019 = 100
30 102 in Switzerland
20 100
10 98
0 96
– 10 94 The Swiss economy has continued the favourable
– 20 92
development it has shown since the beginning of the year.
After modest growth in the fourth quarter of 2021, GDP
– 30 90 increased by just under 2% in the first quarter of this year.
2018 2019 2020 2021 2022 The signals remain positive for the current quarter.
The situation on the labour market has also continued
Change from previous period Level (rhs)
to improve.
Source(s): SECO
The war in Ukraine has thus far had comparatively little
adverse impact on economic activity in Switzerland.
Chart 3.2
That said, energy prices have risen significantly as a result
��� �������� ����� ����� of the war, and supply bottlenecks persist.
Standardised For 2022, the SNB still anticipates GDP growth of around
6 2.5%. Unemployment is likely to remain low. This
favourable forecast is based, among other things, on the
4
assumption that the global economy continues to grow
and that the war in Ukraine does not escalate further.
2
0
The forecast for Switzerland, as for the global economy,
is subject to large risks. If the energy supply in Europe
–2 were to be adversely affected, this could have a serious
impact on the Swiss economy. The global supply
–4 bottlenecks and further increases in commodity prices
could also slow growth. Furthermore, a resurgence
–6 of the coronavirus pandemic cannot be ruled out.
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source(s): SNB OUTPUT AND DEMAND
The SNB takes a wide range of information into account
Chart 3.3 when assessing the economic situation. The information
indicates that economic activity was robust at the
������������� ��� ��� ��� �������� beginning of the year, with GDP growing at a slightly
��������� above-average rate in the first quarter. Although some
Index Index economic indicators have weakened since the outbreak
70 150 of the war in Ukraine, the signals have remained
positive overall up to now.
60 125
Solid GDP growth in first quarter
According to the initial estimate by the State Secretariat
50 100 for Economic Affairs (SECO), GDP grew by 1.9% in
the first quarter of 2022. Economic activity thus regained
40 75 some momentum, compared with the fourth quarter of
last year (cf. chart 3.1).
30 50
13 14 15 16 17 18 19 20 21 22
Manufacturing continued to develop very favourably.
Value added in non-pharmaceutical manufacturing
PMI KOF Economic Barometer (rhs) recorded particularly robust growth, benefiting from strong
Source(s): Credit Suisse, KOF Swiss Economic Institute foreign demand. In services, by contrast, activity was
lacklustre, and in construction, value added declined.
14 Quarterly Bulletin 2 / 2022 JuneOn the demand side, growth in private consumption and Economic signals in both manufacturing and services,
trade in goods remained positive, while trade in services however, continue to be positive. The manufacturing
and investment, on the other hand, declined (cf. table 3.1). purchasing managers’ index (PMI) and the KOF business
tendency survey for manufacturing indicated robust
Economic growth continues growth up to May (cf. chart 3.3). Similarly, the services
Economic sentiment has deteriorated somewhat since PMI suggests that developments will remain favourable
the outbreak of the war in Ukraine, particularly among in the services sector.
households. Overall, however, economic indicators
suggest that developments will remain positive for the The talks held by the SNB’s delegates for regional
economy as a whole. economic relations with companies also signal positive
economic growth in the second quarter. Nevertheless,
The SNB’s Business Cycle Index and the KOF Economic procurement and recruitment problems continue to be
Barometer aim to depict overall economic momentum. a source of concern for companies, and uncertainty
Both indicators declined recently and point to slightly remains considerably high as a result of the war in Ukraine
below-average growth for the second quarter (cf. charts and the lockdowns in China (cf. ‘Business cycle signals’,
3.2 and 3.3). pp. 28 et seq.).
Table 3.1
REAL GDP AND COMPONENTS
Growth rates on previous period in percent, annualised
2018 2019 2020 2021 2020 2021 2022
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Private consumption 0.7 1.4 −3.7 2.6 −25.8 42.6 −6.6 −11.3 17.2 11.0 1.1 1.5
Government consumption 1.0 0.7 3.5 4.0 4.0 0.4 11.1 0.8 8.5 −2.6 5.1 5.6
Investment in fixed assets 1.3 0.6 −1.8 3.5 −26.0 36.7 3.2 −3.2 7.6 −4.1 11.7 −8.7
Construction 0.0 −0.9 −0.4 1.3 −19.0 22.9 −0.6 1.0 −0.3 −0.8 −1.4 −2.6
Equipment 2.1 1.4 −2.5 4.7 −29.7 45.3 5.3 −5.4 12.3 −5.9 19.7 −11.8
Domestic final demand 0.9 1.1 −2.2 3.0 −22.4 34.3 −1.7 −7.4 13.1 4.5 4.6 −1.0
Change in inventories 1 1.0 0.5 −0.9 −2.6 −7.3 −0.1 −2.0 −0.4 −7.6 −1.1 −4.6 10.6
Total exports 2 4.9 1.5 −5.6 11.8 −33.9 30.4 16.0 9.4 14.9 20.4 5.2 −2.7
Goods 2 4.4 3.4 −1.1 11.7 −25.9 40.4 1.6 19.3 8.1 25.8 −8.3 5.9
Goods excluding merchanting 2 4.4 4.9 −2.9 13.3 −44.8 45.0 15.4 20.9 8.8 15.3 11.3 8.5
Services 5.9 −2.3 −14.5 12.1 −48.6 9.0 58.6 −10.5 32.7 8.8 43.1 −19.1
Total imports 2 3.6 2.3 −8.0 5.9 −50.6 47.1 11.6 −2.2 9.8 16.4 4.6 14.2
Goods 2 6.2 2.8 −6.2 4.8 −45.2 54.3 0.9 4.2 −0.8 14.2 4.3 26.9
Services −0.7 1.4 −11.0 8.0 −58.9 34.5 33.9 −12.6 30.7 20.1 5.3 −4.7
Net exports 3 1.1 −0.2 0.4 3.7 4.2 −3.1 3.5 5.9 4.2 4.7 1.1 −7.9
GDP 2.9 1.2 −2.4 3.8 −22.4 27.7 0.2 −0.9 8.1 7.7 0.6 1.9
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
Quarterly Bulletin 2 / 2022 June 15Chart 3.4 LABOUR MARKET
����-���� ���������� ����
The sound economic growth was also reflected in the
Index, beginning of period = 100 labour market.
112
110 Employment growth continues in first quarter
108
The employment trend remained positive in the first
quarter. According to the national job statistics
106
(JOBSTAT), the seasonally adjusted number of full-time
104
equivalent positions rose further. New jobs were created
102 in services as well as in manufacturing and construction
100 (cf. chart 3.4). According to the Employment Statistics
98 (ES), the seasonally adjusted number of persons
96 employed virtually stagnated, having risen substantially
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 in the previous quarter.
Total Manufacturing
Construction Services
Further decline in unemployment ...
In recent months, the unemployment rate published by
Source(s): SFSO; seasonal adjustment: SNB
SECO decreased further. Excluding seasonal fluctuations,
102,000 people were registered as unemployed at the
end of May, 4,000 fewer than at the end of February. The
Chart 3.5
seasonally adjusted unemployment rate stood at 2.2%
������������ ���� at the end of May, similar to the pre-pandemic level in
February 2020. The unemployment figures calculated
% by the Swiss Federal Statistical Office (SFSO) in line with
6 the definition of the International Labour Organization
(ILO) also receded. This seasonally adjusted rate decreased
5
in the first quarter to 4.4%, just 0.2 percentage points
4 higher than before the outbreak of the pandemic
(cf. chart 3.5).
3
… and in short-time working
2
Short-time working also declined further. Provisional
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
figures from SECO suggest that the number of people in
SECO, seasonally adjusted SECO short-time work fell from 60,000 to 22,000 between
ILO, seasonally adjusted ILO December 2021 and March 2022 (cf. chart 3.6). Thus, in
SECO: Unemployed persons registered with the regional employment offices, as a March, 0.5% of all economically active persons were
percentage of the labour force (economically active persons).
ILO: Unemployment rate based on International Labour Organization definition. still in short-time work.
Source(s): SECO, SFSO
Chart 3.6
�����-��� �������
Employees affected
In 1,000s
1 400
1 200
1 000
800
600
400
200
0
2018 2019 2020 2021 2022
Source(s): SECO
16 Quarterly Bulletin 2 / 2022 JuneChart 3.7
CAPACITY UTILISATION
������ �
Output gap closed
%
The output gap, defined as the percentage deviation of
2
actual GDP from estimated aggregate potential output,
shows how well production capacity in an economy 0
is being utilised. In the case of overutilisation the gap is
positive, and in the case of underutilisation it is negative. –2
–4
Overall utilisation of production capacity was average
in the first quarter. Potential output as estimated by means –6
of a production function shows a closed output gap
for the first quarter. Other estimation methods indicate –8
a slightly positive gap (cf. chart 3.7).
– 10
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Higher utilisation
The surveys conducted by KOF show that, overall, Production function HP filter MV filter
utilisation increased in the first quarter. Utilisation of Source(s): SNB
technical capacity rose in manufacturing and construction
to an above-average level (cf. charts 3.8 and 3.9). It also
increased in most areas of the services sector. In the hotel
Chart 3.8
industry, average occupancy rates improved further;
other service industries that had been particularly hard hit �������� ����������� �� �������������
during the pandemic, such as entertainment and transport,
also saw a rise in utilisation. Overall, in the first quarter, %
capacity utilisation in services was back near its long- 86
term average.
84
As regards the labour situation, all surveys indicate that
companies are finding it increasingly difficult to fill vacant 82
positions. In many industries, staff levels are considered
to be on the low side. 80
78
76
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Capacity utilisation Long-term average
Source(s): KOF Swiss Economic Institute
Chart 3.9
�������� ����������� �� ������������
%
80
78
76
74
72
70
68
66
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Capacity utilisation Long-term average
Source(s): KOF Swiss Economic Institute
Quarterly Bulletin 2 / 2022 June 17Chart 3.10
OUTLOOK
������������� ��� ������
Export-weighted, 27 countries The short-term economic outlook for Switzerland
Index remains favourable. Despite the war in Ukraine,
60
companies still assess their current business situation as
very positive (cf. chart 3.11). While there are signs of
55
a certain slowdown in manufacturing, developments in
services are likely to continue to be dominated by the
50 return to normal that began after pandemic measures
were lifted. This applies in particular to transport and
45 hospitality. Thus, for the second quarter, there are
signs that GDP growth will remain strong.
40
For developments beyond that, leading indicators show
35 a mixed picture. Although companies’ business
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 expectations for the coming months have weakened, the
Source(s): International Monetary Fund – Direction of Trade Statistics (IMF – DOTS),
outlook is still very positive (cf. chart 3.11). Surveys
Refinitiv Datastream, SNB indicate that the employment outlook also remains very
positive (cf. chart 3.12), which suggests that companies
continue to view their growth prospects as favourable.
Households, by contrast, are considerably more pessimistic
Chart 3.11
about future developments, with sentiment down
��� ���� � ���� �� significantly as a result of the war.
Average across all KOF surveys
Index
For 2022, the SNB still anticipates GDP growth of around
2.5%. Unemployment is likely to remain low. This
40
favourable forecast is based, among other things, on the
20
assumption that the global economy continues to grow
and that the war in Ukraine does not escalate further.
0
The level of uncertainty associated with the forecast
– 20 remains high. If the energy supply in Europe were to be
adversely affected, this could have a serious impact
– 40 on the Swiss economy. The global supply bottlenecks and
further increases in commodity prices could also slow
– 60
growth. Furthermore, a resurgence of the coronavirus
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
pandemic cannot be ruled out.
Assessment Expected change, next 6 months
Source(s): KOF Swiss Economic Institute
Chart 3.12
������ �� �������
Seasonally adjusted, standardised
3
2
1
0
–1
–2
–3
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
SNB SFSO 1 KOF
1 Seasonal adjustment: SNB
Source(s): KOF Swiss Economic Institute, SFSO, SNB regional network
18 Quarterly Bulletin 2 / 2022 June4 Chart 4.1
���: �������� ��� �������� ����� ���
Prices and inflation ��������
Year-on-year change in CPI in percent. Contribution of individual
expectations components, in percentage points.
3
2
1
0
The inflation rate as measured by the CPI has risen further –1
in recent months. It stood at 2.9% in May, while core
inflation reached 1.7% (SFSO1) and 1.3% (TM15). –2
2018 2019 2020 2021 2022
Short-term expectations also continued to increase. Total Domestic
Longer-term expectations rose somewhat at times, too; Imported, excluding oil products Oil products
however, they remained within the range consistent Source(s): SFSO, SNB
with price stability, which the SNB equates to a rise in
the CPI of less than 2% per year.
CONSUMER PRICES Chart 4.2
���: �������� ����� ��� ��������
Continued rise in annual inflation rate Year-on-year change in domestic CPI in percent. Contribution of
Annual CPI inflation has climbed further since February individual components, in percentage points.
2022. In May 2022, it stood at 2.9%, compared with
2.2% in February – an increase of 1.4 percentage points 1.5
since the beginning of the year (cf. chart 4.1, table 4.1). 1.0
Significantly higher inflation for imported products 0.5
The renewed rise in annual CPI inflation was primarily
0.0
attributable to the increase in inflation for imported
goods and services to 7.4% in May. Inflation for imported – 0.5
products was therefore up 2.5 percentage points on
February, putting it at its highest level in over 40 years. – 1.0
2018 2019 2020 2021 2022
Total domestic goods and services Goods
Services, excluding housing rents Housing rents
Source(s): SFSO, SNB
Table 4.1
SWISS CONSUMER PRICE INDEX AND COMPONENTS
Year-on-year change in percent
2021 2021 2022 2022
Q2 Q3 Q4 Q1 Mar Apr May
Overall CPI 0.6 0.5 0.8 1.4 2.1 2.4 2.5 2.9
Domestic goods and services 0.3 0.2 0.5 0.7 1.2 1.4 1.2 1.5
Goods 0.0 −0.3 0.0 0.2 1.2 2.0 1.9 2.7
Services 0.4 0.3 0.6 0.9 1.2 1.1 1.0 1.0
Private services excluding housing rents 0.3 0.3 0.5 0.9 1.4 1.4 1.0 1.1
Housing rents 0.9 0.7 1.1 1.3 1.4 1.5 1.5 1.4
Public services −0.1 −0.3 0.1 0.0 0.0 0.0 0.0 0.0
Imported goods and services 1.5 1.5 2.0 3.7 4.8 5.5 6.6 7.4
Excluding oil products −0.4 −0.5 −0.4 0.5 2.1 2.5 3.0 3.7
Oil products 17.9 19.2 23.7 32.3 28.1 32.1 38.5 40.6
Source(s): SFSO, SNB
Quarterly Bulletin 2 / 2022 June 19Chart 4.3 The increase was due both to a rise in inflation for oil
������� � ��� products and to higher prices for other imported goods and
services.
%
1.6 Oil products saw inflation climb from 27.2% in February
1.4 to 40.6% in May (cf. table 4.1). Inflation for imported
goods and services excluding oil products also grew at
1.2
a faster rate, amounting to 3.7% in May, compared
1.0 with 2.3% in February.
0.8
0.6 Inflation for domestic products also slightly higher
Inflation for domestic goods and services advanced slightly,
0.4
from 1.3% in February to 1.5% in May (cf. chart 4.2).
0.2
2018 2019 2020 2021 2022 This increase reflected the rise in inflation for domestic
Housing rents (year-on-year change) goods, which stood at 2.7% in May, compared with 1.2%
Reference mortgage rate in February.
Source(s): Federal Office for Housing (FOH), SFSO
Inflation for domestic services excluding housing rents, by
contrast, declined from 1.2% in February to 0.8% in May.
Chart 4.4
Marginally lower rent inflation
���� ��������� ����� Housing rent inflation decreased slightly, from 1.5%
Year-on-year change in February to 1.4% in May (cf. chart 4.3). The reference
%
mortgage rate has remained unchanged since the
beginning of 2020.
3
2
Higher core inflation
The SFSO core inflation rate 1 (SFSO1) increased from
1 1.3% in February to 1.7% in May. Core inflation, as
measured by the SNB’s trimmed mean (TM15), rose in the
0 same period from 1.0% to 1.3% (cf. chart 4.4). Both core
inflation rates thus reached their highest levels since 2008.
–1
PRODUCER AND IMPORT PRICES
–2
2018 2019 2020 2021 2022
Higher inflation for producer and import prices
CPI TM15 SFSO1 Inflation for total producer and import prices again rose
Source(s): SFSO, SNB more strongly than in the previous quarter. In May, it stood
at 6.9%, compared with 5.8% in February (cf. chart 4.5).
Inflation rates for the two individual components followed
Chart 4.5 a similar pattern. In May, inflation for import prices came
to 11.9%, while for producer prices it was 4.4%. The high
�������� ��� ������ ������ inflation levels in both producer prices and import prices
Year-on-year change were mainly attributable to oil products and intermediate
% inputs (e.g. metal, timber and plastic).
15
10
5
0
–5
– 10
2018 2019 2020 2021 2022
Total Producer prices Import prices
Source(s): SFSO
20 Quarterly Bulletin 2 / 2022 JuneINFLATION EXPECTATIONS Chart 4.6
�����-���� ����� ��� ��������� ������������
Rise in short-term inflation expectations Aggregate responses from SECO survey on consumer sentiment
The majority of indicators for short-term inflation and CS CFA financial market survey
expectations rose further in comparison with the previous Index Index
quarter. 200 100
The index on the expected development of prices over 100 50
the next twelve months, which is based on the survey of
consumer sentiment conducted by SECO, climbed to 0 0
its highest level since 2008 (cf. chart 4.6). According to
the April survey, just under 90% of households anticipated – 100 – 50
a continued rise in prices in the short term.
– 200 – 100
The index based on the joint monthly financial market 13 14 15 16 17 18 19 20 21 22
survey by Credit Suisse and the CFA Society Switzerland SECO: expected price development in 12 months
recently returned to a level similar to that of the previous CS CFA: expected inflation rate in 6 months (rhs)
quarter (cf. chart 4.6). In the May survey, around a half Source(s): CFA Society Switzerland, Credit Suisse, SECO
of respondents felt that inflation would increase further in
the next six months. At the same time, the share of those
who were anticipating a decline in inflation rates stood at
Chart 4.7
roughly one-third.
�����-���� ��������� ������������ ����
The banks and economic institutions participating in ��������� ���������
the monthly survey conducted by Consensus Economics Monthly forecasts for annual inflation
adjusted their forecast for expected inflation in 2022 %
upwards; in May, they put inflation at 2.1% (cf. chart 4.7). 2.5
Meanwhile, for 2023, the panel of experts anticipated
a fall in inflation, to 1.0%. 2.0
1.5
In the talks conducted by the SNB’s delegates for regional
economic relations, companies expected a considerably 1.0
higher level of inflation in the short term (cf. chart 9 in
‘Business cycle signals’). The expected annual inflation 0.5
rate for the next six to twelve months increased from
0.0
2.3% in the previous quarter to 3.1%.
2021 2022
Medium-term inflation expectations also up slightly 2022 2023
The indicators for medium-term inflation expectations Source(s): Consensus Economics Inc.
also rose somewhat. For CS CFA financial market survey
respondents, average inflation expectations for a time
horizon of three to five years increased at end-March and Chart 4.8
stood at 1.7%, compared with 1.3% in December 2021
(cf. chart 4.8). Company representatives interviewed by ������ ��� ����-���� ���������
the SNB’s delegates put inflation for the same time frame ������������
at around 1.9%, compared with 1.6% in the previous %
quarter. 2.0
By contrast, according to the Consensus Economics 1.5
survey conducted at end-March, the long-term inflation
expectations of participating banks and economic 1.0
institutions remained unchanged at 1.1%.
0.5
All available survey results on medium and long-term
0.0
inflation expectations were thus still within the range
13 14 15 16 17 18 19 20 21 22
consistent with price stability, which the SNB equates to
a rise in the CPI of less than 2% per year. CS CFA financial market survey (3–5 years)
SNB delegates for regional economic relations (3–5 years)
Consensus Economics (6–10 years)
Source(s): CFA Society Switzerland, Consensus Economics Inc., Credit Suisse, SNB
Quarterly Bulletin 2 / 2022 June 215 Repo transactions in money market
Since the monetary policy assessment in March 2022,
Monetary developments the SNB has been conducting repo auctions to provide
liquidity via the secured Swiss franc money market.
It also provided the market with liquidity via bilateral
repo transactions at the end of May. The aim of these
operations was to counter upward pressure on short-term
secured money market rates. The upward pressure
was partly due to the fact that, because of their dynamic
In the period following the March monetary policy calculation, exemption thresholds had risen more
assessment, share prices temporarily recovered but strongly than the sight deposits held at the SNB. The
thereafter fell markedly again. The yields on long-term result was a decrease in the volume of those sight
Confederation bonds rose significantly over the same deposits, which are subject to negative interest.
period. The Swiss franc depreciated noticeably against
the US dollar, and was somewhat weaker against the Higher sight deposits at the SNB
euro than at the end of March. Sight deposits held at the SNB have increased since
the monetary policy assessment in March. In the week
There was a further decrease in the growth rates of the ending 10 June 2022 (last calendar week before the
broad monetary aggregates, this being attributable to the assessment of June 2022), they amounted on average
higher interest rates. Growth in bank lending declined to CHF 753.1 billion. This was higher than in the last
slightly, but remained robust. calendar week preceding the 24 March 2022 assessment
(CHF 728.9 billion). Between these two assessments,
MONETARY POLICY MEASURES SINCE LAST they averaged CHF 747.6 billion. Of this amount,
ASSESSMENT CHF 664.9 billion were sight deposits of domestic banks
and the remaining CHF 82.7 billion were other sight
Monetary policy remains expansionary deposits. Statutory minimum reserves averaged
At its monetary policy assessment of 24 March 2022, the CHF 23.1 billion between 20 February 2022 and 19 May
SNB confirmed its expansionary monetary policy stance 2022. Overall, banks exceeded the minimum reserve
with a view to ensuring price stability and providing requirement by CHF 645.9 billion (previous period:
support to the Swiss economy. It also emphasised the CHF 636.4 billion). Banks’ excess reserves thus
heightened uncertainty worldwide as a result of the war in remained very high.
Ukraine. It 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, in order to counter upward
pressure on the Swiss franc. In so doing, it took the
overall currency situation and the inflation rate differential
with other countries into consideration.
22 Quarterly Bulletin 2 / 2022 JuneMONEY AND CAPITAL MARKET INTEREST RATES Chart 5.1
��� ����� ���� ��� ���� ������ �����
SARON close to SNB policy rate
SARON, the average overnight interest rate on the %
secured money market, stood at – 0.70% in mid-June. – 0.68
Since the monetary policy assessment in March, SARON – 0.69
has fluctuated between around – 0.69% and – 0.72%.
It thus remained consistently close to the SNB policy rate – 0.70
of – 0.75% (cf. chart 5.1). – 0.71
– 0.72
Rise in capital market interest rates
In Switzerland, the yield on ten-year Confederation bonds – 0.73
climbed from 0.4% at the time of the last monetary policy – 0.74
assessment to around 1.4% in mid-June (cf. chart 5.2), thus
reaching its highest level since 2014. The rise in yields – 0.75
was largely in line with that of long-term government bonds Q1 21 Q2 Q3 Q4 Q1 22 Q2 Q3 Q4
in the US and the euro area. The main reason for the SNB policy rate SARON
increase both domestically and internationally was revised Source(s): Bloomberg, SIX Swiss Exchange Ltd, SNB
expectations surrounding the monetary policy response
to high inflation levels.
Chart 5.2
Yield curve shifts upwards
The yield curve for Confederation bonds shifted upwards ��-���� ����� ������������� ���� �����
compared to the last monetary policy assessment. At
the same time, it steepened somewhat, as short-term %
interest rates rose less strongly than long-term rates. In 1.5
mid-June, yields for all maturities in excess of one year
1.0
were in positive territory for the first time since 2014
(cf. chart 5.3).
0.5
Slightly higher real interest rates
0.0
Real interest rates – the difference between nominal interest
rates and inflation expectations – are an important factor – 0.5
in the saving and investment decisions of companies and
households. – 1.0
With a moderate increase in longer-term inflation – 1.5
expectations (cf. chapter 4), the considerable increase in 2018 2019 2020 2021 2022
long-term nominal yields since the last monetary policy Source(s): SNB
assessment led to a slight rise in real interest rates.
By historical standards, however, the estimated long-
term real interest rate remained at a low level. Chart 5.3
���� ��������� �� ������������� �����
Years to maturity (horizontal axis); Nelson-Siegel-Svensson method
%
2.0
1.5
1.0
0.5
0.0
– 0.5
– 1.0
0 5 10 15 20
Mid-June 2022 Mid-March 2022
Mid-December 2021
Source(s): SNB
Quarterly Bulletin 2 / 2022 June 23Chart 5.4 EXCHANGE RATES
�������� �����
Exchange rates driven by market expectations
1.06 of monetary policy tightening
Since the monetary policy assessment in March, the
1.04
Swiss franc has weakened primarily against the US dollar
1.02 (cf. chart 5.4). Between early April and mid-May,
1.00 the dollar appreciated across a broad front, and thus also
against the franc. In mid-May, one dollar was briefly
0.98
worth more than a franc, the highest it has been since
0.96 2019. The dollar’s appreciation primarily reflected
0.94 the expected tightening of monetary policy in the US.
0.92
Having initially been stable from the end of March,
0.90 the EUR/CHF exchange rate began to rise in early May.
Jan 22 Feb Mar Apr May Jun Key drivers of this momentum were again market
USD in CHF EUR in CHF expectations that the ECB could raise policy rates as
Source(s): SNB early as July.
The Swiss franc started to strengthen again in mid-May
on the back of expectations that monetary policy in
Chart 5.5
Switzerland could also be tightened sooner than previously
������� �������� ����� �� ����� ����� assumed. The franc weakened again noticeably in June,
however. In mid-June, it stood at just under 1.05 to the
Index, March 2022 monetary policy assessment = 100 euro, and one dollar was worth roughly one Swiss franc.
103
Nominal trade-weighted external value
102
of Swiss franc weaker
101 Since the last monetary policy assessment, the Swiss
franc has weakened by around 3% in nominal trade-
100
weighted terms (cf. chart 5.5). This was largely driven
99 by the franc’s depreciation against the US dollar
(down 7%, index weighting 15%).
98
Real depreciation
97
In previous quarters, the nominal appreciation of the
96 Swiss franc had roughly corresponded to the inflation
Jan 22 Feb Mar Apr May Jun rate differential between Switzerland and other countries,
Source(s): SNB so that the franc’s real valuation had hardly changed
(cf. chart 5.6).
Chart 5.6 This differential has widened over the last few months,
while the franc has weakened somewhat on a nominal
���� �������� ����� �� ����� ����� basis since the March assessment. As a result, the franc
Index, December 2000 = 100
has depreciated in real terms.
130
120
110
100
90
08 09 10 11 12 13 14 15 16 17 18 19 20 21 22
Source(s): SNB
24 Quarterly Bulletin 2 / 2022 JuneSHARE AND REAL ESTATE PRICES Chart 5.7
����� ������ ��� ����������
Further decline in global share prices
The recovery of global stock markets that began in early Index %
March came to a halt in April. The combined effect of the 13 000 35
war in Ukraine and uncertainty about monetary policy
responses to the rise in inflation drove share prices down 12 500 30
worldwide. Corporate earnings remained solid, however,
thus helping to stabilise share prices somewhat. 12 000 25
Nevertheless, in the period since the last monetary 11 500 20
policy assessment, share prices of Swiss companies have
recorded a considerable decline. In mid-June, the 11 000 15
Swiss Market Index (SMI) was down around 11% on
its end-March level (cf. chart 5.7). 10 500 10
Jan 22 Feb Mar Apr May Jun
Rise in stock market volatility SMI Volatility Index on the SMI (rhs)
The volatility index derived from options on SMI futures Source(s): SIX Swiss Exchange Ltd
contracts is an indicator of how investors gauge uncertainty
on the stock market (cf. chart 5.7). Since the monetary
policy assessment in March, the risk aversion and
Chart 5.8
uncertainty of stock market participants had initially
increased slightly. The situation on stock markets eased �������� ��� �������
somewhat in May. Nevertheless, due in part to uncertainty
Index, 1 January 2022 = 100
surrounding the pace of monetary policy tightening in the
US and euro area, in mid-June the level of the volatility 110
index was significantly higher than it had been at the end
of March. 100
Movements in sector indices mixed 90
Chart 5.8 shows the movements of important sector
indices in the broad-based Swiss Performance Index
80
(SPI). All sector indices have fallen since the beginning
of the year, although the scale of price losses differs
significantly from one industry category to another. 70
While in mid-June shares of financials stood roughly Jan 22 Feb Mar Apr May Jun
7% below the levels at the beginning of the year, Healthcare Consumer goods
the other sectors recorded more substantial losses in the Financials Industrials
same period. The price declines were most pronounced Source(s): SIX Swiss Exchange Ltd
for shares of industrials, which lost around 25% of
their value up to mid-June.
Chart 5.9
Continued rise in residential real estate prices
Transaction prices for privately owned apartments and ����������� ������ ��� ����������� ����
single-family houses increased further in the first quarter of ������
Nominal (hedonic)
2022 (cf. chart 5.9). The apartment buildings segment –
which includes residential investment property of private Index, beginning of period = 100
and institutional investors – also saw prices rise tangibly, 150
after they had stagnated in the fourth quarter of 2021. 140
130
120
110
100
90
80
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)
Quarterly Bulletin 2 / 2022 June 25Chart 5.10 MONETARY AND CREDIT AGGREGATES
������� ����
Rise in monetary base
In CHF billions The monetary base, which consists of banknotes in
800 circulation and sight deposits of domestic banks held at
the SNB, has increased further since February. This
600 rise primarily reflects the growth in sight deposits of
domestic banks, and can largely be attributed to repo
400
auctions conducted by the SNB to steer SARON. In May,
the monetary base averaged CHF 755.4 billion
(cf. chart 5.10), and was thus up around CHF 4.7 billion
200
on February.
0 Slower growth in broad monetary aggregates
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Growth in the broad monetary aggregates continued to
Monetary base Banknotes in circulation slow in the last three months (cf. table 5.1). In May 2022,
Sight deposits the M1 aggregate (currency in circulation, as well as
Source(s): SNB sight deposits and transaction accounts of resident bank
customers) was up 3.3% year-on-year (February: 3.8%).
Annual growth rates for the M2 and M3 monetary
aggregates also declined. In May, M2 (M1 plus savings
Chart 5.11
deposits) grew by 0.2% (February: 0.8%), while M3
�������� ������ ��� �������� ����� (M2 plus time deposits) recorded year-on-year growth of
0.1% (February: 1.0%). The decrease in these growth
%
rates is primarily attributable to higher long-term interest
5 rates. Higher capital market interest rates reduce the
incentive to hold bank deposits at relatively low rates
4 of interest.
3 Little change in lending growth
Bank lending by domestic bank offices in all currencies
was up 3.0% year-on-year in the first quarter of 2022,
2
having risen by 3.4% in the fourth quarter of 2021
(cf. table 5.1). Both mortgage lending and other lending
1 contributed to the slight decline in the growth rate.
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Mortgage claims (year-on-year change) Banks’ mortgage claims, which make up roughly 85%
10-year mortgage rate of all bank lending to domestic customers, were up 3.3%
Source(s): SNB year-on-year in the first quarter of 2022 (cf. chart 5.11).
In line with interest rate movements on the capital market,
Chart 5.12 interest rates for fixed-rate mortgages also rose in recent
months. The ten-year mortgage interest rate climbed from
�������� ������ ��� ����� ����� 1.4% in December 2021 to almost 2.5% in April 2022, thus
In CHF billions In CHF billions
reaching its highest level in eight years. From a long-term
perspective, however, mortgage rates remain relatively
1 150 130
low. So far, demand for mortgage loans does not appear to
1 100 120 have been affected by this rise in interest rates.
1 050 110
1 000 100
950 90
900 80
850 70
800 60
13 14 15 16 17 18 19 20 21 22
Mortgage claims Other loans, secured (rhs)
Other loans, unsecured (rhs)
Source(s): SNB
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