"The numbers are largely in line with expectations, but the problem everyone has with this indicator is that the numbers are a bit all over the place of late"
- Reto Huenerwadel, economist at UBS
Switzerland's economic momentum slipped for the fifth consecutive month in March, diminishing chances that it will turn a corner next month. The KOF Swiss Economic Institute said a gauge of economic sentiment, which was designed to predict future economic performance in roughly six months, slipped to 0.99 points this month, down from a revised 1.04 points in February. Analysts, however, predicted an improvement to 1.07. However, the index trend now indicates a stabilisation, according to KOF. Despite the decline, Swiss economy managed to expand by 1.0% during the last year, adding to signs that the economy is still gaining pace even despite deepening Eurozone crisis, albeit slowly.
"It appears we are seeing the KOF bottoming out, especially in light of the strengthening in PMI," Bank Sarasin Jan Poser said. "Maybe next month already we'll see that the KOF has actually bottomed (out), reflecting a recovery in the Swiss economy."
Reto Huenerwadel, economist at UBS, said: "The numbers are largely in line with expectations, but the problem everyone has with this indicator is that the numbers are a bit all over the place of late. The numbers are weakening but it is certainly a plus that we are still in positive territory. But there is no way of validating the time series for this indicator, as it is largely a black box indicator."
© Dukascopy Bank SA