Swiss KOF Economic Barometer rose from 89.2 to 92.2 in December, above expectation of 90.9. This is also the first rise since April. KOF said, “the outlook for the Swiss economy is thus brightening slightly for the beginning of 2023, although remaining at a low level.”
KOF also noted: “The comparatively strong upward movement of the barometer is primarily driven by bundles of indicators from the manufacturing sector and the other services sector. Indicators covering financial and insurance services as well as accommodation and food service activities also send a positive signal.”
Bundesbank Nagel: Further policy action needed to halt and reverse rising inflation expectations
Bundesbank President Joachim Nagel warned in an interview, “our monthly surveys of firms and households are showing a significant increase in long-term inflation expectations.”
“I firmly believe that we need to take further monetary policy action to halt and reverse this trend,” he added.
Nagel also said that allowing inflation to become entrenched would be even worse. “Then we would be forced to tighten policy all the more sharply further down the line, thus placing even more of a strain on the economy.”
“I am optimistic that Germany will be able to avoid a severe economic slump and we will get off lightly with a mild downturn. And I am confident that we will be able to tame the high rate of inflation over the medium term”, he noted.
“There is a distinct risk of stronger second-round effects because the higher wage deals that are being reached could prolong the prevailing period of high inflation rates”
Full interview here.