GDP forecast based on semantic business cycle identification

Release 2019-05-16
    Figure 1: Business cycle indicator and Swiss GDP with forecast  


Forecast update. Swiss growth takes another hit as the May reading of the «KOF Surprise Indicator» logs -0.05 (2018 Q4: -0.03), a level last seen in late 2009. This drop indicates that annual growth has stalled with year-on-year expansion now in negative territory at -0.2 percent in the first quarter of 2019.
«home   Table: Swiss real gross domestic product with forecast  

Year-to-year growth (%) of Swiss real gross domestic product (GDP)
fitted / forecast
standard error
seco estimates*

Sources: Own calculations, forecast for 2019(1), fitted values otherwise, *seco releases (left: November 28, 2018, right: February 28, 2019).

Sample: 2000 (2) - 2018 (4), Forecast: 2019 (1)

Note: Forecast obtained by best nowcasting model.

Outlook. Recovered stock prices, strong pharmaceutical export figures and persistent signs of shortages on the labour market have soothed recession worries in the first couple of months of the current year.

  However, the latest «KOF Surprise Indicator» reading is a wake-up call and strong reminder that the hostile U.S. trade policy, over-heating real estate markets and mounting international policy risks owed to tensions in the Middle East and the looming Brexit have eventually tipped the balance in favour of a rather gloomy outlook..  
    It is, therefore, time to re-iterate the call for preparing fiscal policy measures for mastering the troubled waters lying ahead. Low interest rates and investors' thirst for government bonds offer an unprecedented opportunity to fight the dawning downturn at very low costs (if any).  

Special feature: What's knowledge in economics? In contrast to science that offers the prospect of clear-cut answers to precise questions, economists very often give ambigious if not outright contradictory advice. What may look like as a severe drawback should be embraced as a key and rewarding challenge, this brief note argues (in German). Read on»

Previous update
Standard error of regression*
Business cycle data (csv) download
  2018-11-14 release
  2018-08-15 release
  2018-05-25 release
  Complete release history
  First release
Next release 2019-08-14
    *Standard error of regression refers to baseline model published in the first release.  

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