In August 2016, the ZEW-CS-Indicator for the economic sentiment in Switzerland has once again experienced a decrease. With a drop by 8.7 points to a reading of minus 2.8 points, the indicator continues the downward trend already seen in the previous month. When it comes to the current economic situation, however, the surveyed experts recorded an upward trend, with the relevant indicator rising from 0.0 points in July

2016 to a current reading of 11.3 points. The ZEW-CS Indicator reflects the expectations of the surveyed financial market experts regarding the economic development in Switzerland on a six-month time horizon. It is calculated monthly by ZEW, Mannheim, in cooperation with CS, Zurich.

Even though the ZEW-CS Indicator has returned to negative territory for the first time since February 2016, the vast majority of experts (68.6 per

cent) expect the economic development to remain unchanged in the coming six months. The negative indicator reading is due to the fact that the share of experts forecasting a positive economic development for the coming six months has fallen to 14.3 per cent. At the same time, 17.1 per cent of the respondents expect the economic situation to worsen. As in the previous months, the surveyed experts continue to show great unity with regard to the current economic situation, which is considered to be "normal" by 82.9 per cent of the analysts. 14.2 per cent consider the current situation as "good" and only 2.9 per cent as "poor", which results in the indicator's positive balance.

Meanwhile, the previous high inflation expectations have been revised downwards in the current survey. The difference between analysts that expect a rise in inflation rates and analysts that expect declining inflation rates can be used as a measure for inflation expectations. For Switzerland, this difference has fallen by 19.9 points to a reading of 25.6 points. This trend is likely to result from the rise in inflation rates in July 2016, which have increased for the first time in months. The inflation rate in Switzerland lies at minus 0.2 per cent in comparison to the same month of the previous year. In view of these developments, far fewer experts expect inflation to rise further. While inflation expectations for the eurozone have seen a similar development, experiencing a decrease by 26.6 points, expectations for the USA have merely decreased by 7.4 points to a reading of 44.2 points.

More detailed results – including survey participants' assessment of developments in other countries – can be found in this month's edition of the "Switzerland Financial market report" (please note that the URL is case

sensitive): http://www.zew.de/zew-cs-financialmarketreport

You can find a data sheet with the complete results of the survey in the attached PDF-file.

For further information please contact:

Markus Teske (ZEW), Phone +49 (0)621 1235-372, E-mail teske@zew.de

Lukas Gehrig (Credit Suisse), Phone +41 44 333 52 07, E-mail lukas.gehrig@credit-suisse.com