Dear Swiss franc plunged the economy – Republic

Dear Swiss franc plunged the economy – Republic

Source: Bloomberg

exemptions, bankruptcy, flight companies abroad, the lack of tourists – Swiss entrepreneurs and economists fear the effects of Thursday’s decision of the Swiss National Bank.

The abolition of the minimum exchange rate of the franc against the euro has the Swiss, who was going skiing or shopping to Austria. The Swiss bank euro on Thursday could be bought for a little more than 1 franc, when even the day before cost more than 1.2. However, in the longer term, the unexpected decision of the SNB can only hurt the Swiss economy.

The most exporters complain because their already expensive goods now will be even harder to sell. For example, companies from the mechanical and electrical engineering abroad send nearly 80 percent. their products. – To reduce costs, some companies will have to move the production for abroad – warns Andreas Steffes, chief economist of the Swiss Chamber of Commerce. UBS estimates that one movement SNB Swiss exporters can cost up to 5 billion francs, ie approx. 0.7 percent. GDP. – It tsunami for the export sector, tourism and the whole country – says the decision SNB Nick Hayek, CEO of Swatch frmy.

Extreme movements in the markets investors also hit consumers. – Are endangered wages and employment, mainly in the sector is also a danger of deflation eksportowym.Wzrasta – warns Daniel leopard, chief economist of the Swiss Federation of Trade Unions.

According to economists, the abolition of the minimum price a negative price impulse for the Swiss economy. UBS estimates that within a month the price index may fall by as much as 0.9 percent. According to estimates Kof Swiss Economic Institute, if the euro exchange rate will remain at 1.1 franc, the Swiss this year GDP will increase by less than 1 percent. Even before the decision of the SNB, it was expected that it will be 1.5-2 per cent. Bak economic institute in Basel predicts that in the longer term if the exchange rate will decrease to 1.05 in 2016. Switzerland can come close to recession, and the unemployment rate to 3.6 percent jump. from 3.1 per cent. out.

Switzerland may also lose revenue from tourism, because it too expensive frank increase the cost hikes in the Alps. Prohibitively expensive in this country deterred many tourists before the decision of the SNB. Now you can only get worse. – Strengthening of the Swiss franc causes a huge increase in prices holidays Switzerland and hit the core of our economy – says Christoph Juen, head of the association Hotelleriesuisse hotel industry. Exemptions are afraid to employees of the tourism industry.

The economists do not spare criticism of the SNB, especially since a few days ago, representatives of the bank assured that maintaining the exchange rate in check is and will be holiness. – Known for its predictability SNB completely surprised markets, experts and entrepreneurs. This decision contradicts previous assurances about its commitment to defend the franc and straining the credibility of the central bank – says Armin Mueller, chief economist at Swiss daily business “Handelszeitung.”

Agnieszka Kaminska from Zurich