We do not know yet how the initiative will be implemented and what effect it will have on our relationship to the EU. Consequently, the economic impact of the popular decision cannot really be properly quantified at the moment, and this is why it has not been included in our forecast. For 2014, we continue to expect economic growth of around 2%. Inflation in Switzerland and the SNB’s monetary policy The greater economic momentum which we are forecasting will gradually lead to a better utilisation of production capacity. The underutilisation which still prevails continues to restrain consumer prices in Switzerland. Declining inflation abroad and the slightly stronger Swiss franc are having a similar impact by dampening imported inflation. Thus the SNB’s inflation forecast shows that there is no risk of inflation in the foreseeable future. In 2014, inflation in Switzerland is likely to amount to only 0%. In addition, the international environment is still giving rise to high levels of uncertainty. Consequently, the danger that the Swiss franc, as a safe haven, might suddenly be subject to further upward pressure has not been averted. Short-term interest rates are practically zero. For this reason, the minimum exchange rate is the right tool to avoid an undesirable tightening of monetary conditions, since an appreciation of the Swiss franc would lead to a further decline in import prices and a renewed threat of deflation. Given this situation, the SNB is maintaining the minimum exchange rate of CHF 1.20 per euro.
By contrast, interest rate increases could become necessary again in a number of emerging economies, to prevent further depreciation of their currencies and counter high inflation. As you can see from this list of items, unfortunately the risks for economic growth have not diminished. The European crisis may have become somewhat less virulent, but it has not been overcome. Moreover, additional uncertainties have emerged and the Swiss franc is still high. Overall, the environment remains extremely challenging for both the Swiss economy and our monetary policy. Outlook for Switzerland in 2014 I will now look at developments in Switzerland. In 2013, our economy did quite well, primarily as a result of stable domestic demand. This year we are expecting the economy to maintain a similar momentum, driven by domestic demand as well as, increasingly, by foreign demand. Thus the global economy will supply positive growth impetus, which will assist export industries, in particular. Accordingly, production capacity utilisation is expected to be higher and companies should see further improvement in their financial situation. Given this situation, investment looks set to regain momentum. During the months ahead, unemployment is likely to decline slightly. However, this essentially positive scenario is associated with external risks which I have already outlined. Furthermore, the popular federal initiative approved in February to curb 2  BIS central bankers’ speeches  immigration represents an additional element of uncertainty as far as the economy is concerned.