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Fitch Ratings affirms Switzerland's IDR at 'AAA'.

London: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, affirmed Switzerland's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'AAA'.

With a Stable Outlook, Switzerland's 'AAA' rating reflects its track record of prudent economic and fiscal policies, a diversified and wealthy economy, high levels of human development and strong governance metrics. Switzerland surpasses its 'AAA' peers on most key indicators. GDP per capita is estimated to be 1.4x the 'AAA' median.

Fitch expects real GDP growth this year to be 2.1% and 1.9% in 2019. Despite the recent improvement in growth prospects, real GDP growth in the five years to 2017 was substantially lower than the 'AAA' median (1.6% compared with an estimate of 2.1% for the 'AAA' median). The pick-up in economic activity has been accompanied by positive labour market developments. Economic growth picked up in 2H17, in the context of an improved economic outlook in the eurozone, higher growth in world trade, and rising business and consumer confidence.

Consumer price inflation turned positive in 2017, averaging 0.6%. Inflation dynamics are still expected to be somewhat subdued over the next two years, with inflation forecast to average 1.0% this year, and 1.3% in 2019. On 15 March the Swiss National Bank (SNB) left its expansionary monetary policy stance unchanged. The SNB underlined that it remains willing to intervene in the foreign exchange market as necessary, and that in its view, the negative interest rate remains essential. We assume that the SNB policy interest rate will remain negative both this year and next.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Date:Jun 14, 2018
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