Global growth momentum has continued to slow down. At the same time, inflation in many countries is markedly above central banks’ targets. Accordingly, numerous central banks have further tightened their monetary policy. In our baseline scenario for the global economy, we expect this challenging situation to persist for now. Global economic growth is likely to be weak in the coming quarters, and inflation will remain elevated for the time being. Over the medium term, however, inflation abroad should return to more moderate levels, not least due to the increasingly tighter monetary policy in many countries. Our scenario for the global economy is subject to significant risks. The energy situation in Europe could worsen again. At the same time, high inflation could become embedded and require renewed stronger monetary policy responses abroad. Finally, the coronavirus pandemic remains an important source of risk for the global economy. Swiss economic outlook  What is the economic outlook for Switzerland? GDP grew at an annualised rate of 1.0% in the third quarter. Economic momentum thus remained similarly modest as in the preceding quarters. While many service industries fared well, there was a renewed slight decline in value added in manufacturing. The situation on the labour market remained positive. Employment continued to rise, and unemployment decreased again slightly. Overall production capacity has been well utilised. Switzerland’s GDP is likely to grow by around 2.0% this year. However, weaker demand from abroad and the high energy prices are likely to curb economic activity markedly in the coming year.
There are also numerous examples of tax systems discriminating between domestic and international financial transactions, which of course impedes the customers’ incentives to use foreign suppliers, even if they offer more favourable terms for the actual service. Integration contributes to greater welfare Despite the difficulties in moving ahead more quickly with financial integration in the EU, there are estimates that it may be extensive enough in the future to make a contribution of more than one half of 1 a per cent to GDP on an annual basis. The actual figure should perhaps not be seen as exact, but there is reason to expect an unequivocally positive connection between financial integration and real growth on the basis of the development trends observed so far. A larger market makes it possible to benefit from economies of scale and economies of scope. This means increased economic welfare for the financial system’s customers, provided that a sufficient degree of competition is maintained on the market and that there are efficient systems for supervision and oversight to ensure the stability of the system is upheld. If, for instance, European securities funds could operate under the same market conditions as American ones, they could become much larger than they are now. According to the same source as above, this could entail annual savings for European fund savers of 5 billion euro 2 close to 50 billion kronor! More diversified demand A more efficient supply also presupposes changes on the demand side.