Company: SWZ
Filing Date: 2025-03-11
Form Type: N-CSR
Source: 0001839882-25-014961
Chunk: 6

Company: Total Return Securities Fund
Filing Date: 2025-03-11
Form: N-CSR
Chunk 6
---
 SoftwareOnewas sold due to governance and credibility issues in their mid-term growth guidance. 6 THE SWISS HELVETIA FUND, INC. Outlook We expect the global economy to continue to deliver growth in the region of 2.5-3% over the next couple of years. However, the relative stability of our global forecast masks some major shifts at the country level, as stronger growth in the US is expected to be offset by weaker growth elsewhere. We continue to believe that expectations for the US economy are slightly pessimistic. Consumers are in good shape and, with the labor market cooling rather than collapsing, household spending should continue to drive growth. However, there is uncertainty about the policy outlook following the election of Donald Trump. We believe pro-growth policies, along with relatively mild supply-side measures, will boost growth to around 2.5% in 2025, with a slight acceleration to 2.7% in 2026. Faster growth may result in inflation remaining higher than previously assumed and that, after some more near-term easing, the focus of the Fed will turn to rate hikes in 2026. We expect the eurozone economy to register some improvement in 2025/26, but from a low level. While consumers have benefited from lower inflation, sticky price pressures are likely to limit the room for further interest rate cuts. We think the ECB’s terminal rate will be 2.5%, higher than market expectations. Meanwhile, we believe there is no end in sight to the drag from the structural decline of European manufacturing. In Switzerland, the State Secretary of Economic Affairs (“SECO”) reduced its estimates for GDP growth to 0.9% for 2024 (September forecast was 1.2%) and slightly reduced its forecast for 2025 to 1.5% (September forecast was 1.6%). Inflation forecasts have been further reduced to 1.1% for 2024 (September forecast was 1.2%) and 0.3% in 2025 (September forecast was 0.7%). This low inflation rate allowed the Swiss National Bank (“SNB”) to make the decision to lower interest rates by another 0.5% in December to 0.5%. The overall environment for equities remains positive, supported by a low but stable GDP growth environment and declining interest rates. Although we expect the change in administration in the US to be positive for equity markets, there is a substantial risk that Trump’s policies could be far