The monthly ZEW Credit Suisse survey on the financial health of the Swiss economy has shown the strongest decline since its creation in 2006, with the six month forecast declining by 62.2bsp to -73bsp.
“The massive decline illustrates that a majority of respondents expect that the elimination of the fixed exchange rate between euro and franc will lead to a clear deterioration in comparison to the present economic situation” the authors state.
The assessment of the current economic situation in Switzerland deteriorated by 45.9bsp to -5.4bsp. In addition, 62% of respondents believe that the SNB move will lead to a further decline of price levels.
Expectations on the long term exchange rate between euro and franc are currently mixed, however, a majority of respondents believe that the franc will devalue slightly against the euro in the long run.
In contrast to the grim outlook on the Swiss economy, respondents continue to show slight optimism on the state of the eurozone, with the six month outlook improving by 7.4bsp to 41.7bsp.
The recent survey was conducted in February among 37 Swiss analysts. While the Swiss government has not yet officially downgraded its growth outlook, the KOF Swiss Economic Institute downgraded its growth forecast from 1.9% to -0.5% in early February.