to antoine martin, who will address the global economic outlook. global economic outlook global economic growth was moderate in the third quarter of 2024. economic activity remained solid in the us, while in the euro area it improved only slightly. growth in the chinese economy was rather modest by longer - term comparison. the services sector continued to contribute positively to economic activity worldwide. by contrast, momentum in large parts of manufacturing remained subdued. recently, inflation in many countries was again close to central banks ’ targets. this was due, among other things, to lower energy prices. however, core inflation remained elevated. in page 2 / 4 anticipation of a continued decline in inflation, various central banks cut their policy rates further this quarter. underlying inflationary pressure abroad is likely to carry on easing gradually over the next quarters. at the same time, the pace of global growth should remain moderate. household purchasing power should continue to recover and, together with the monetary policy easing, support growth. uncertainty about the economic outlook has increased in recent months. in particular, the future course of economic policy in the us is still uncertain, and political uncertainty has also risen in europe. in addition, geopolitical tensions could result in weaker development of global economic activity. equally, it cannot be ruled out that inflation could remain higher than expected in some countries. this brings us to the situation in switzerland, which petra tschudin will present. swiss economic outlook as expected, gdp growth in switzerland was only modest in the third quarter of 2024. growth in the services sector was again somewhat stronger, while value added in manufacturing declined. there was a further slight increase in unemployment, and employment growth was only subdued. the utilisation of overall production capacity was normal. we anticipate gdp growth of around 1 % for the current year. thanks also to the easing of monetary policy in recent quarters, growth should pick up somewhat next year, albeit only slightly due to the moderate global economic activity. we currently expect growth of between 1 % and 1. 5 % for 2025. in this environment, unemployment should continue to rise slightly, while the utilisation of production capacity is likely to decline somewhat. our forecast for switzerland, as for the global economy, is subject to significant uncertainty. developments abroad represent the main risk. i will now hand back to martin schlegel. monetary policy outlook ladies and gentlemen, allow me to return to our monetary policy. at our september assessment, we had already indicated that further monetary policy easing

supply for credit. yet additional insights are possible when considering it separately. for instance, a structural low interest rate level such as typically observed in switzerland can help explain a relatively high credit - to - gdp ratio in international comparison. similarly a prolonged period of exceptionally low rates such as the one we are currently experiencing is a potential explanation for an increase in credit volumes. at a superficial level this relation is obvious. low interest rates reduce the cost of servicing a given credit which becomes affordable for a broader range of households. alternatively, borrowers can afford higher credit lines. moreover, low interest rates translate into higher asset prices and higher notional wealth. the increased collateral values support higher credit lines and decrease the amount of credit rationing. this is, in particular, relevant with stiglitz, j. and weiss, a. bis central bankers ’ speeches reference to the real estate market where higher house prices imply higher mortgage volumes to finance the same stock of housing. the rationality of this explanation has to be relativized, however. this is certainly the case if we think of credit financing long run projects such as real estate. here the average interest rate over the life - time of the credit must be relevant for investment decisions. an exceptional, prolonged period of low rates might imply a decrease in the lifetime average rate, a form of “ window of opportunity ”. however, the very fact that interest rates must – eventually – rise again implies that credit expansion based on low interest rates cannot be viewed as a shift to a permanent higher credit level. at higher interest rates, credit demand will decline once again. to the extent that the credit expansion was driven by miscalculations on credit affordability, this may even lead to a crisis. 3. 4. behavioral biases the latter remark leads to a fourth potential explanation, that is, credit expansion driven by behavioral biases. as highlighted by hyman minsky7, the credit cycle appears to be driven by “ waves of optimistic and pessimistic sentiment ” 8. in an upswing, expectations about future developments may turn erratically exuberant. observing a long period of price increases, investors tend to believe that new circumstances justify the perpetuation of the upward trend and act on this belief. overconfident lenders and borrowers are increasingly ready to take higher risks. ever increasing prices become a necessary condition to enable borrowers to service their debts. then the tide turns. a few investors fail to meet their obligations,