Overall, economic activity is likely to be very weak for the remainder of this year, before gradually recovering in the course of 2010. In particular, the substantial fall in commodity prices since the summer of 2008 is supporting real disposable income and thus consumption. In addition, external as well as domestic demand should increasingly benefit from the effects of the significant macroeconomic stimulus under way as well as from the measures taken so far to restore the functioning of the financial system both inside and outside the euro area. Taking all these measures and their effects into account, as well as the pronouncedly negative growth in the first quarter of this year and the most recently published forecasts by public institutions, the risks to this outlook remain broadly balanced. On the downside, there are concerns that the turmoil in financial markets could have a stronger impact on the real economy, as well as that protectionist pressures could intensify and that there could be adverse developments in the world economy stemming from a disorderly correction of global imbalances. At the same time, there may be stronger than anticipated positive effects due to the decrease in commodity prices and to the policy measures taken. Annual HICP inflation was, according to Eurostat’s flash estimate, 0.6% in April, unchanged from March. As explained on earlier occasions, the decline in inflation since last summer primarily reflects the sharp fall in global commodity prices over this period. Moreover, signs of a more broad-based reduction in inflationary pressure are increasingly emerging.
In the planning phase for the technical feasibility and during initial production tests in 2010, it became evident that the complexity of the new security features necessitated a postponement of the issue date to autumn 2012. In autumn 2011, during an early phase of the serial production, technical difficulties arose which had not been discernible in the testing phase, whose results were positive. For this reason, the SNB this year decided to conduct a comprehensive re-assessment of the entire project together with the industrial partners producing the new banknote on its behalf. As a result, several mostly technical measures were defined and in some cases have already been implemented. These measures should ensure that the series can go into long-term industrial production. Owing to the complexity and scope of the necessary work, the first denomination of the series, the CHF 50 note, may be expected in 2015 at the earliest. The SNB will announce the issue date as soon as production of the first banknote denomination has been completed. Since the National Bank wants to continue meeting the highest quality standards, it has accepted a postponement in the new issue, a decision which was rendered all the easier because the banknotes currently in circulation continue to offer a high standard of security. BIS central bankers’ speeches  3