thomas jordan : global economic outlook and economic developments in switzerland introductory remarks by mr thomas jordan, chairman of the governing board of the swiss national bank, at the media news conference of the swiss national bank, berne, 12 december 2013. * * * ladies and gentlemen welcome to the swiss national bank ’ s news conference. i would like to begin today by explaining the snb ’ s monetary policy decision before moving on to present our assessment of the economic situation and monetary conditions. my colleague, jean - pierre danthine, will then talk to you about developments in connection with financial stability and banknotes. finally, my colleague, fritz zurbrugg, will look at the current situation on the financial markets, as well as at the management of our currency reserves and interest rate benchmark reforms. as always, we will conclude with a question and answer session. i will now start with our monetary policy decision. as you will have no doubt expected, the snb is maintaining its minimum exchange rate of chf 1. 20 per euro. the swiss franc is still high. with the three - month libor already practically at zero, the minimum exchange rate continues to be the right tool for ensuring appropriate monetary conditions in switzerland. if the swiss franc were to appreciate, this would have significant consequences for the swiss economy. on the one hand, an appreciation would lead to a further decline in import prices and a renewed threat of deflation. in this regard, we should bear in mind that inflation in the last two years has been predominantly negative. on the other hand, with an ongoing unfavourable international environment and a strong swiss franc, the situation for our economy remains challenging. should it become necessary, we will therefore enforce the minimum exchange rate by buying foreign currency in unlimited quantities. and, if required, we will also take further measures. in addition, we are leaving the target range for the three - month libor at 0. 0 – 0. 25 %. the snb bases its monetary policy decision on a conditional inflation forecast, which assumes an unchanged three - month libor of 0. 0 % over the next three years. you will find the relevant chart in your media kit. compared to september, our forecast has been adjusted downwards slightly. reasons for this are the unexpectedly low rates of inflation for october and november, which serve as a lower departure point for the forecast, as well as the decline in inflation in the euro area and the slight fall in the oil

price, which both help to dampen the inflation outlook. for 2013, we still anticipate inflation of – 0. 2 %. for 2014 and 2015, the inflation forecast is down in each case by 0. 1 percentage points and is now at 0. 2 % and 0. 6 % respectively. consequently, no inflation risks can be identified for switzerland in the foreseeable future. global economic outlook the snb ’ s inflation forecast is embedded in a global economic scenario. i would therefore like to begin with our assessment of the global economy. global economic recovery continued as expected in recent months, with the main drivers being the us, the uk and china. in the euro area, by contrast, growth lacked momentum and inflation slowed considerably more than expected. in many emerging economies, too, economic activity was rather sluggish. the outlook for the global economy has not changed significantly since the september monetary policy assessment. our forecasts suggest that growth will pick up gradually in the bis central bankers ’ speeches coming quarters. further recovery is likely to be underpinned by a number of factors, including stable international financial markets, a less restrictive fiscal policy and a very expansionary monetary policy in the major advanced economies. europe, however, will continue to experience below - average growth, with banks ’ restrained lending policies and ongoing uncertainty hampering investment activity. in addition, the high level of unemployment in this region will also hold back private consumption. uncertainty about the continued recovery of the global economy remains high overall. in many advanced economies, room for manoeuvre in economic policy is being constrained by the fact that interest rates are already very low and government indebtedness is high, making the global economy especially prone to shocks. we expect that the euro area will overcome the crisis in the medium term. however, the forthcoming assessment of banks ’ balance sheets could cause some ripples. furthermore, exiting from unconventional monetary policy measures is as yet uncharted territory. spikes on international financial markets therefore cannot be ruled out during the process of normalising monetary policy in the major currency areas. swiss economic outlook i will now look at economic developments in switzerland. the economy continued to develop favourably in the third quarter. annualised real gdp was up by slightly more than 2 %. unlike the previous quarter, goods exports grew substantially. domestic demand, however, lost some momentum. on the output side, manufacturing in particular recorded positive growth, having previously fallen for three successive quarters. construction continues to be