Swiss central bank expects ‘negative’ growth for 2020

The Swiss National Bank said on Thursday that the coronavirus pandemic had worsened the short-term outlook for the country’s economy.

Swiss central bank expects 'negative' growth for 2020

The outlook for the Swiss economy is grim. Photo by Fabrice Coffrini / AFP

 “The downturn in the international economy and the measures to contain the 
virus will lead to a marked decline in economic activity in Switzerland… GDP 
growth is likely to be negative for the year as a whole,” Swiss National Bank (SNB) said in a statement. 

It added that it will “be working closely with the Federal Council to provide the best possible support to the economy”.

The SNB added that it is maintaining its current policy rate and interest on sight deposits at the SNB at −0.75 percent.

The central bank will try to lessen the economic impact of the Covid-19 epidemic while intervening heavily on currency markets to slow the appreciation of the safe-haven Swiss franc.

Switzerland’s goal is to keep the Swiss Franc from appreciating because the country relies heavily on exports with the European Union. But when the franc rises, it makes Swiss products less competitive — that is, too expensive — in eurozone markets. 

The frenzy unleashed on the financial markets by the health crisis has strengthened more than ever the safe haven status of the franc. Last week alone, the National Bank's interventions in the foreign exchange market increased by 4.5 billion. This is the largest weekly increase since March 2017.

In 2011, the central bank had capped the franc at 1.2 euros, devaluing the Swiss currency by 8 percent. The SNB took this drastic step by printing billions of francs and using them to buy foreign money, pushing its foreign currency reserves to record highs.

However, in 2015, the SNB abandoned the cap, saying it was no longer justified. The franc's value immediately soared by around 30 percent.

In January 2015, the SNB had acquired foreign currency for 86.1 billion francs, then 67.1 billion in 2016, and 48.2 billion in 2017.

Only two months ago, experts predicted a positive outlook for the Swiss economy in 2020, attributing it to a strong manufacturing industry, increase in foreign demand and private consumption, as well as the recovery in the construction sector.

The pandemic has had devastating effects on Switzerland’s economy, threatening the existence ofsmall and medium-size companies, which constitute 99 percent of the country’s businesses.

Last week, the Federal Council announced a 10-billion-franc package to help companies and employees to make it through the crisis.

READ MORE: UPDATE: Switzerland declares state of emergency over coronavirus



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Switzerland’s Montreux Jazz Festival cancels concerts of unvaccinated British artists

Switzerland’s Montreux Jazz Festival announced on Friday that it was forced to drop the acts of four UK-based artists from its summer program because they haven’t been fully vaccinated yet.

Switzerland's Montreux Jazz Festival cancels concerts of unvaccinated British artists
British singer-songwriter Rag'n'Bone Man was dropped from Montreux Jazx Festival. Photo: GUILLAUME SOUVANT / AFP

The move was done in order to comply with current Covid-19 entry rules into Switzerland, which state that from June 26th, travellers from outside the Schengen zone, including Brits, will only be allowed to enter Switzerland if they have been fully vaccinated or have recovered from the virus. 

READ ALSO: Switzerland relaxes travel rules for vaccinated Americans and Brits: What you need to know

British soul singer Rag’n’Bone Man who was one of the headliners for the 2021 edition of the festival, which starts on July 2nd, will now no longer be able to attend due to not being fully vaccinated.

Other unvaccinated acts based in the UK who were also dropped because of the new entry rules include Inhaler, Alfa Mist and the Yussef Dayes Trio.

The artists have already been replaced with other performers from around Europe including Italian singer Zucchero, Woodkid, Dutch songwriter Benny Sings and Danish jazz trio Athletic Progression.

In a statement on June 25th, festival organisers said they were trying to make sure that the concerts of the other UK artists would continue to go ahead, however it is tricky because of fears over the Delta strain of the Covid virus, which has now become dominant in Britain.

“Whether or not these artists can come depends on their vaccination status and that of their touring entourage, as well as their ability to quarantine at the start of their European tour or before their concert at Montreux,” they said.

The Montreux Jazz Festival is one of just a small handful of big music festivals in Switzerland that will still go ahead this summer. Other music events such as St Gallen Open-Air, Paléo and Bern’s Gurten festival have been cancelled for the second year in a row, due to ongoing fears over the Covid-19 virus.

READ ALSO: UPDATE: What rules do European countries have for travellers from the UK?