One field where this is all the more obvious, because it has to do with competition on the global market, is the management of forex reserves. In principle, they ensure – especially in the case of emerging economies – the resources to overcome external imbalances and to safeguard a relative stability of the domestic currency’s exchange rate around economic fundamentals. The reallocation of reserves for discretionary use and their monetisation strongly erode these essential equilibria, significantly impairing market functionality and the credibility of the central bank and of any government, ultimately to the detriment of society itself. Maintaining and managing an adequate level of international reserves, through the competence and professionalism of the central bank, shelter the country from terrible crises; take this right away and the country is left to the mercy of the winds. For all these reasons, in the context of extensive debates internationally on the importance of central bank independence – debates that I am aware of and I am not contesting –, I plead for the independence of central banks, but also for an institutional balance between central banks and fiscal authorities, as parts of the executive power. Macroeconomic stability – a key prerequisite for sustainable economic and social development – is ensured when there is a balance between the monetary policy and the fiscal policy. Altering the well-established institutional rapports, in times of crisis, may pose a serious risk for the future.
In our baseline scenario for the global economy, we expect growth in the coming quarters to remain in line with potential. In the advanced economies, expansionary monetary policy is lending support, as is fiscal policy in some countries. Inflationary pressure is likely to remain moderate. The risks to this baseline scenario for the global economy are still to the downside. However, they are more pronounced than at our previous monetary policy assessment. Chief among them are political uncertainty and trade tensions, which could lead to renewed turbulence on the financial markets and a further dampening of economic sentiment. Swiss economic outlook  I shall now turn to the economic outlook for Switzerland. The Swiss economy also gathered momentum at the beginning of the year. According to the initial estimate, GDP grew by 2.3% in the first quarter. Growth was broad-based across the different sectors of the economy. Labour market developments were also positive. Employment figures continued to rise, and the unemployment rate remained stable at a low level. Production capacity in Switzerland was well utilised overall. As regards the developments in the second quarter and the months thereafter, the surveys and leading indicators are currently presenting a mixed picture. All in all, however, they point towards momentum remaining favourable. Even in manufacturing, which is likely to be affected most directly by weaker industrial activity, expectations are that the business situation will continue to improve. Companies’ plans regarding capital spending and recruitment also remain positive, which offers further grounds for confidence.