We continue to expect growth of 1.0–1.5% for the year 2013 as a whole. Consequently, we do not expect that the Swiss economy will return to full utilisation of production capacity in the near future. Monetary and financial conditions I will now turn to monetary and financial conditions. In recent weeks, volatility in financial markets has again increased. Since the last monetary policy assessment, however, the export-weighted external value of the Swiss franc has remained largely unchanged. Recent developments suggest that safe-haven considerations continue to play an important role in the demand for Swiss francs. Overall, the value of the Swiss franc remains high and should fall further over the next few quarters. The level of interest rates in Switzerland remained very low in the first quarter. On the secured Swiss franc money market, interest rates are in negative territory. Yields at issue for Confederation money market debt register claims also continue to be negative. By contrast, yields on ten-year Confederation bonds have risen slightly from the lows reached last December. Movements in long-term interest rates show that demand for secure investments  2  BIS central bankers’ speeches  reacts strongly to the international environment. My colleague, Fritz Zurbrügg, will talk about developments on financial markets in more detail afterwards. Banks’ sight deposits at the SNB have not increased any further since September 2012. However, growth in the M1, M2 and M3 monetary aggregates, which measure the amount of money held by households and companies, remained strong.

Since the beginning of 2011, real exports have been moving sideways. They are being held back not only by the high value of the Swiss franc, but also by the subdued momentum in world trade. Moreover, investment by Swiss companies is hesitant. One reason for this is uncertainty about further developments in the global economy. However, further factors dampening investment activity are pressure on profit margins and the continued overcapacity in parts of the manufacturing industry. According to information derived from the quarterly survey carried out by SNB regional delegates, this cautious approach will persist in the near future. This means that domestic equipment investment in 2013 will probably stagnate. On the output side, too, developments were mixed in the first quarter. Construction, banking, insurance and health recorded clearly positive growth figures. In manufacturing, business activity merely stabilised. In this area, the situation in the metal processing and machine industries, in particular, remains difficult. Both of these industries are suffering from weak industrial activity and the lack of investment demand on the part of companies in many European countries. Most recently, growth in employment has slowed, and unemployment has risen again somewhat, in seasonally-adjusted terms. We expect that unemployment figures will increase again marginally to the end of the year. For the second quarter, we forecast a perceptible weakening in growth compared to the strong first quarter. In the following quarters, if the recovery of the global economy strengthens, economic momentum is likely to increase gradually again.