Despite a lurch back into deflation in February, we believe that Swiss prices will find a firmer footing over the medium term. A combination of robust economic growth, loose monetary policy and a very modest multiyear depreciation of the Swiss franc will lay the foundations for a gradual build up in inflationary pressures. However, we warn that at this stage Switzerland is still vulnerable to a deflationary shock, with falling export prices in Germany and China, as well as a correction in global commodity markets, being a particular cause for concern. exchange rate policy -- cHF Depreciation Delayed By russia-ukraine crisis During the period of intense financial market turmoil in the eurozone in ----, Switzerland became a key destination for safe haven flows given the relatively benign economic and political environment and depth and liquidity of Swiss markets. With the Ukraine-Russia crisis still simmering, the Swiss franc is coming under renewed pressure. ...We forecast Switzerland s real economic growth to average -.- over our forecast period on account of the solid fundamentals underpinning the domestic economy. TABle: lONG-TeRM MACROeCONOMIC FOReCASTS -- chapter -: Business environment -- sWot analysis -- BMi Business environment risk ratings -- Business environment outlook -- institutions --
...Source: BMI, CIA binding obligations as the existing member states, it has still breached a major agreement which is seen as a requisite for ac- cess to the single market. Brussels, as well as politicians from across the EU, were quick to rally against the vote and have warned that access to the single market is now under threat. ...The bleak macro outlook and sharp rise in un- employment, coupled with the frustration with policymakers unable to resolve the myriad of economic challenges facing Europe, has fuelled support for fringe political parties. The likes of the UK Independence Party (UKIP) and France s Front National have capitalised on anti-immigration sentiment, which has proliferated as unemployment has soared, posing a serious threat to traditional domestic political parties and the ability of the European Union to reform. If Switzerland were able to implement quotas on immigration this would be seized on by the anti-immigration parties as evidence that the EU s fundamental laws can be renegotiated. ...This could deter foreign firms from setting up facilities in Switzerland, and may trigger the departure of firms already resident in the country. - Business Monitor International Ltd www political outlook immigration Quotas on the Way
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