Skip to main content

In the shadow of the euro-zone

Weak growth in the euro-zone overshadows near-term prospects in Switzerland and the Nordics. We expect activity to slow in most countries this year and to stay sluggish in 2020. As a result, price pressures should generally remain subdued, prompting central banks to leave interest rates low for longer, or even cut them further in the case of Denmark. Meanwhile, if the ECB eventually re-starts QE, as we think likely, the resulting upward pressure on the Swiss franc will make life uncomfortable for the SNB. The exception is Norway, where the Norges Bank is a rare example of a central bank in tightening mode. A pick-up in oil investment will support growth this year. But if our forecast for oil prices to fall proves accurate, we think that the Bank will call a pause in its tightening cycle and leave rates on hold in 2020.

Become a client to read more

This is premium content that requires an active Capital Economics subscription to view.

Already have an account?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to gain:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services

Get access