assuming that the three - month libor remains constant at 0. 25 % over the next twelve quarters, and it covers the period from the first quarter of 2011 to the first quarter of 2014. for purposes of comparison, the ( dash - dotted ) green curve shows the conditional inflation forecast published in march, which was also based on the assumption of a three - month libor of 0. 25 %. until the beginning of 2012, the path of the snb ’ s new conditional inflation forecast lies above that of the previous quarter ’ s forecast. this is attributable to the assumption of higher oil prices compared to the previous quarter and somewhat higher import prices. the significant increase in the third quarter of 2011 is due to a base effect, because inflation in the corresponding quarter of 2010 was comparatively low. in addition, a one - off statistical effect can be expected in the third quarter of 2011. this is attributable to more frequent data collection in the case of prices for clothing and shoes ; it also accounted for an increase in inflation in the first quarter. during the course of 2012, the path of the new forecast falls below that of march, due to the slowdown in inflation attributable to the latest appreciation in the swiss franc. towards the end of the forecast period, inflation rises briskly and exceeds the upper bound of 2 %. this shows that the current expansionary monetary policy cannot be maintained over the entire forecast horizon without compromising price stability in the long term. due to the risks mentioned previously, the conditional inflation forecast is, however, associated with a high level of uncertainty. bis central bankers ’ speeches conditional inflation forecast of march 2011 and of june 2011 percentage change in national consumer price index from previous year inflation forecast march 2011 ( with libor at 0. 25 % ) forecast june 2011 ( with libor at 0. 25 % ) % 2. 5 1. 5 0. 5 – 0. 5 observed inflation june 2011 i nf l at i on q2 q3 q4 q1 q2 q3 q4 q1 q1 q2 q3 q4 q1 2. 5 2. 7 3. 0 1. 6 0. 0 - 0. 7 - 1. 0 - 0. 2 1. 1 1. 0 0. 3 0. 3 0. 6 q2 q3 2. 4 - 0. 5 0. 7 q4 conditional inflation forecast of march 2011 with libor at 0. 25 %

to the risks mentioned previously, the conditional inflation forecast is, however, associated with a high level of uncertainty. global economic outlook economic growth continued worldwide in the first quarter, although there were considerable regional differences. as in the previous quarters, the emerging economies recorded the highest growth rates. in the euro area, particularly germany, the recovery was supported by strong export and investment activity. in the us, by contrast, high energy prices weighed on sentiment and held back growth. in addition, the persistent crisis on the real estate market is hampering the economic recovery. in japan, there was a significant decline in gdp as a result of the earthquake. although the international economic outlook is somewhat less favourable than in march, the upswing in the global economy is likely to be maintained in the months ahead. in the us, in particular, the latest production and labour market indicators have been disappointing. due to the high commodity prices and the production losses in japan, the snb has revised its 2011 growth forecast for the advanced economies downwards to some extent. moreover, numerous countries are planning to undertake additional cost - cutting measures in the year bis central bankers ’ speeches ahead. the rise in commodity prices since autumn of last year is expected to result in significantly higher inflation worldwide in 2011. swiss economic outlook according to the seco estimate, the growth of real gdp in switzerland slowed in the first quarter, mainly because of the muted advance in private consumption and equipment investment. by contrast, exports recorded a marked gain as a result of robust international demand, particularly from germany and asia, despite the strength of the swiss franc. the strong momentum in construction also supported growth. utilisation of technical capacity continued to pick up and was above the long - term average in manufacturing ; in the construction sector it actually attained a record high level. the recovery on the labour market also continued. after a massive increase during the crisis, measures introducing short - term work have largely been retracted. in may, the seasonally - adjusted unemployment ratio decreased to 3. 0 % and companies are reporting more difficulties in recruiting qualified employees. due to the appreciation of the swiss franc, export - geared companies are exposed to strong price competition. in manufacturing, in particular, margins are under very strong pressure in some cases. however, survey results still suggest that robust foreign demand allows for good utilisation of capacities and supports exports. the short - term outlook also remains good for domestic demand. construction investment is benefiting from favourable financing conditions, while higher