These measures keep the attractiveness of Swiss franc investments low and thus ease pressure on the currency. A renewed appreciation would still be a threat to price and economic developments. The new conditional inflation forecast for the coming quarters is higher than it was in September. This is mainly due to increased oil prices and the further weakening of the Swiss  Page 1/4  Berne, 14 December 2017 Thomas Jordan  News conference  franc. The longer-term inflation forecast is virtually unchanged. For the current year, it has risen marginally to 0.5%, from 0.4% in the previous quarter. For 2018, we anticipate an inflation rate of 0.7%, compared to 0.4% in September. For 2019, we continue to expect inflation of 1.1%. The conditional inflation forecast is based on the assumption that the threemonth Libor remains at –0.75% over the entire forecast horizon. Global economic outlook  I would now like to turn to economic developments abroad, as these have a considerable bearing on the inflation and economic outlook in Switzerland. The past few months have seen further improvements in the international environment. The global economy exhibited strong, broad-based growth in the third quarter. International trade, in particular, remained very dynamic. In view of companies’ improved capacity utilisation and growing confidence, investment continued to recover. Developments in employment remained positive, which helped to raise household confidence, too. In most countries, inflation moved sideways. Economic signals for the coming months are positive, as well. We expect the global economy to continue developing favourably.

Growth was primarily driven by manufacturing, which benefited from  Page 2/4  Berne, 14 December 2017 Thomas Jordan  News conference  dynamic global economic developments and the weaker Swiss franc. Accordingly, exports recorded marked gains. Investment in equipment also grew noticeably. In the wake of this development, capacity utilisation in manufacturing increased further. The overall economic situation improved, too. Higher capacity utilisation, a more robust earnings situation and favourable global economic prospects contributed to a further rise in business confidence. These factors generally strengthen the willingness to invest. The gradual recovery on the labour market has also continued. The unemployment rate declined again slightly through to November. The demand for labour among companies has gradually picked up. Due to continued pressure on prices and costs, however, businesses are only cautiously increasing their headcounts. Employment growth is therefore likely to remain moderate. Given the supportive global environment and favourable monetary conditions, the recovery in the Swiss economy looks set to continue in the coming months. For 2018, we expect GDP growth of around 2%, following 1% in 2017. Compared to the current year, 2018 should be characterised by stronger growth stimuli mainly from exports and corporate investment. Inflation expectations, interest rates and exchange rates  I will now review changes in inflation expectations and monetary conditions. Inflation expectations for Switzerland have remained practically unchanged over the past half year. Households and companies still expect low inflation of around 0.5% in the short term. In the longer term, expectations lie at approximately 1%.