This correction is the result, in particular, of the less favourable economic outlook for Europe compared with the last assessment. For 2011 it is marginally higher, due mainly to a higher price for oil. Assuming an unchanged three-month Libor of 0.25%, average inflation for 2010 is expected to amount to 0.7%, for 2011 to 0.4% and for 2012 to 1.0%. The conditional inflation forecast shows that there is no threat to price stability in the short term. However, the rising path in 2012 and 2013 shows that the current expansionary monetary policy cannot be maintained over the entire forecast horizon without compromising long-term price stability. The inflation forecast is still associated with a very high level of uncertainty. Global economic outlook  I would now like to take a closer look at the economic situation and at monetary conditions. Overall, the recovery in the global economy continued, encouraged by expansionary economic policies and vigorous economic activity in the emerging economies. In the euro area, however, growth slowed markedly in the third quarter. The favourable developments in Germany’s economy differ from those in the peripheral countries of the euro area, with their weak growth. The recent financial market turmoil is likely to hamper activity in the euro area. Although domestic demand is gradually firming up in the US, the momentum is insufficient for a sustainable reduction in unemployment, which remains high. In addition, construction investment is suffering from the situation on the real estate market. Consequently, GDP growth in the US will remain modest.
Philipp Hildebrand: Global and Swiss economic outlook Introductory remarks by Mr Philipp Hildebrand, Chairman of the Governing Board of the Swiss National Bank, at the end-of-year media news conference, Zurich, 16 December 2010. *  *  *  The Swiss National Bank (SNB) is maintaining its expansionary monetary policy. It is leaving the target range for the three-month Libor unchanged at 0.00–0.75%, and intends to keep the Libor within the lower part of the target range at around 0.25%. The global economic recovery is continuing. While the growth dynamic in emerging economies is vigorous, the recovery in the industrialised economies remains modest overall. Growth in Switzerland was robust in the third quarter of 2010, but the weakening of exports, in particular, points to a significant reduction in growth in the quarters ahead. The SNB expects GDP to grow by some 1.5% in 2011, following growth of about 2.5% in the current year. Monetary policy operates in an environment of heightened uncertainty. Concerns about stability in the euro area have led to renewed financial market tensions. Against this backdrop, the Swiss franc has again appreciated. Should these tensions be exacerbated and put a strain on economic developments in the euro area, this would also have a detrimental effect on the Swiss economy. If a deflation threat emerges, the SNB would take the measures necessary to ensure price stability. The SNB’s conditional inflation forecast for 2012 and 2013 is slightly below the September forecast.