The list of economic indicators shown below is of high relevance for both Switzerland and the Swiss franc (CHF), its current fiat currency, and therefore should be followed carefully by traders and investors who trade with this currency (currency pairs like the USD/CHF and EUR/CHF).
Switzerland’s KOF Leading Economic Indicators (Konjunkturforschungsstelle der eth, Zurich)
The KoF leading indicators are regularly published by the Swiss Institute for Business Cycle Research. Usually, this index is used to measure the future state of the economy in Switzerland. It consists of six components:
- Change in manufacturers’ orders,
- Procurement plans for manufacturers expected for the next three months
- Appreciation of stocks in wholesale
- Accumulation of orders in the construction sector
- Perception of consumers regarding their financial situation
- Accumulation of orders for manufacturers.
Consumer Price Index
The Consumer Price Index (CPI) indicator in Switzerland is calculated every month based on the retail prices paid in the country. In line with common international practices, commodities covered are characterized according to the concept of consumption, which is included in the calculation of the index of goods and services that are part of the total private consumption, as specified in the National Accounts of Switzerland. In this case, the basket of goods does not include the so-called transfer costs, including direct taxes, premiums for health insurance, and social security contributions. This indicator is important because is used to measure the inflation in the country.
Gross domestic product
The Gross Domestic Product (GDP) in Switzerland is a measure of the total production and consumption of goods and services in that country. This indicator is calculated as the sum of expenditures of households, companies, governments, and the net foreign purchases. In this case, the GDP price deflator is used to convert the product measured and calculated at current prices into a GDP expressed in constant dollars.
This information is used to determine at what point is Switzerland in the business cycle
. Usually, it is estimated that rapid GDP growth is inflationary, while a low or negative growth is a sign of weakness in the economy and even recession.
Balance of payments
The term “balance of payments” includes all transaction accounts in Switzerland with the rest of the world. The current account, for example, is the trade balance plus the service sector. The balance of payments is an important indicator for traders and Swiss investors because Switzerland has always had a strong current account balance. Any positive or negative variation that is present in the balance of payments can mean significant capital flows into or out of the country, which may influence the prices of the Swiss franc against other currencies.
Production Index (Industrial Production)
This index of industrial production in Switzerland is a quarterly measure of the variation in the volume of industrial production or the physical output of domestic producers.
In Switzerland, the Retail Sales Report is published monthly 40 days after the reference month and is an important indicator of consumer habits in the country. Unlike other indicators, Retail Sales are not seasonally adjusted.