GENEVA: Andrea Maechler, one of the three members of the Swiss National Bank’s (SNB) governing board said that in addition to the currency valuation, other factors including interest rates, changes in prices and the global situation must also be taken into account when assessing the confederation’s economic outlook.
“It’s clear that the strong Swiss franc remains a big challenge for many businesses in Switzerland,” Maechler said in an interview.
“The value of the Swiss franc is an important factor for Switzerland’s economy, but it is not the only one,” she added.
According to the Swiss official, Swiss gross domestic product (GDP) is expected to increase by 1.5 percent this year, matching last year’s growth. Switzerland’s unemployment rate, which stood at 3.3 percent in December last year, is also much lower than the 4.0 percent recorded in 2009 and the 5.0 percent in the mid-1990s, she added.
While expecting a gradual improvement in the labor market, Maechler noted that certain sectors, including Switzerland’s engineering and watch making industries, had been hampered by the strength of the Swiss currency, as well as by external factors such as the drop in Asian demand for timepieces.
When asked why the SNB was not striving to achieve an exchange rate of 1.10 francs per euro (the Swiss franc is currently trading at around 1.08), Maechler reminded that “a country’s economy cannot rely on one magical number, as important as the exchange rate is.”
“Its competitiveness is linked to both its capacity to innovate and deal with the challenges which it must face,” she added.
