The ongoing recovery of the real economy, however, is likely to produce higher core inflation in these economies, too, in the near future. Against the backdrop of an expanding economy and higher inflation, the US Federal Reserve raised its key interest rate in March – the third interest rate hike since the end of 2015. The  Page 2/10  normalisation of US monetary policy is therefore continuing. By contrast, the European Central Bank and the Bank of Japan are maintaining their expansionary monetary policy. Does this mean there is cause for optimism for the period ahead? Global economic sentiment is really quite positive. Nonetheless, significant political uncertainties remain. Within the euro area, the French elections are currently dominating the headlines. Uncertainty persists about how Brexit will unfold. Looking across the Atlantic, there are still a number of questions concerning the new US administration’s future economic and trading policy. New political directions which influence the growth of our trading partners are of course highly relevant for a small open economy like Switzerland. And what about the economic situation here at home? The Swiss economy is still recording moderate growth (cf. chart 3). Following the discontinuation of the minimum exchange rate, GDP contracted as a result of Swiss franc appreciation in the first quarter of 2015. However, since then, the economy has grown, and current economic data indicate that this growth will sustain. For 2017, we are forecasting an increase in GDP of some 1.5%. Nevertheless, production capacity is still not fully utilised.
Collectively, the award recipients and all other financial institutions have helped in making CGC a stronger SME-support institution. This is so as their active participation opened a new window of opportunities not only for the SMEs but also for the CGC in reaching out to a wider cross section of the SME community throughout the country. In 2007, CGC provided credit guarantees totalling RM4.6 billion to more than 13,000 SMEs through our main schemes, the programmed lending schemes as well as the securitisation of SME loans. There was actually remarkable growth with the number of loans and amount guaranteed growing by 73% and 53% respectively. This could be attributable to the strong support given by participating financial institutions that have been robust in serving the SME market in the recent years. I particularly note with interest that the seven recipients today collectively contributed more than 80% of the total loans guaranteed by CGC in 2007. In view of the changing facets of SME financing, CGC undertook several initiatives to further reach out to SMEs that are in need of financing. This includes the introduction of innovative products and services as well as widening the scope of guarantee beneficiaries by forging alliances with strategic partners. In the last two years, CGC has entered into strategic partnership with many local and international institutions with the aim both of expanding its SME outreach as well as to better equip itself with the expertise and knowledge to take it to a higher service delivering platform.