intervene in the foreign exchange market are intended to ease pressure on the swiss franc. our monetary policy thus helps to stabilise price developments and support economic activity. global economic outlook as our inflation forecast is heavily influenced by economic developments abroad, let me now present our assessment of the global economy. global economic growth was weaker than expected in the third quarter of 2015. this was mainly due to subdued manufacturing activity around the globe and sluggish world trade. the chinese economy is currently undergoing structural change, and growth in the country ’ s industrial output has therefore slowed considerably since the beginning of the year. this has curbed manufacturing activity worldwide and weighed on commodity prices. global investment activity in the third quarter has thus been hesitant. this has especially impacted economies with strong global trade links as well as commodity - exporting countries. bis central bankers ’ speeches in contrast to manufacturing, the services sector performed well in most countries due to robust domestic demand. particularly in the us and europe, private household consumption has regained momentum. contributing factors were the decline in energy prices and a further improvement in the labour market. the snb has revised its short - term growth forecast for the global economy slightly downwards, but the outlook for the medium term remains unchanged. on the whole, the moderate recovery in the advanced economies looks set to continue, on the back of highly expansionary monetary policy and low energy prices. increases in public spending should also stimulate demand. in this environment, inflation is likely to pick up again. our overall assessment of global economic prospects is cautiously optimistic. we nevertheless see significant risks. the structural change underway in china could continue to hold back global manufacturing and investment activity. equally, structural weaknesses in europe have yet to be addressed. current concerns about public safety could also weigh on economic developments. swiss economic outlook the slower pace of global economic growth was also felt in switzerland, with the first official gdp estimate indicating stagnation in the third quarter. economic performance thus came in below expectations. this was mainly due to a slump in value added in trade and the financial sector. growth in manufacturing was positive, but varied greatly from one sector to another. aside from the strong swiss franc, sluggish global manufacturing activity was also undoubtedly a factor. demand for swiss intermediate goods and equipment was particularly lacklustre. on closer examination, however, the economic situation appears somewhat more favourable. there are three reasons for this. first, growth was materially inhibited by an unusually sharp dip in energy output over the summer

it implies that the phillips curve is steeper today than in the past ( that is, that inflation is more sensitive to slack in the economy ), a prediction that does not accord with most empirical studies. the dollar prices of imports are also affected by changes in the value of the exchange rate. however, the effects of exchange - rate changes on the domestic prices of imported goods have been quite low in recent years. cost emerging - market economies have also helped keep down the prices of imports received by the united states and other industrialized countries. indeed, the share of u. s. non - oil imports coming from the emerging asian economies has increased from 27 percent to 34 percent over the past decade or so. overall, research indicates that trade with developing economies in particular has slowed the rate of growth of import prices faced by industrialized countries, with estimates of the reduction ranging widely from 1 / 2 to 2 percentage points. one study, for example, estimated that trade with china alone has reduced annual import price inflation in the united states by about 1 percentage point over the period 1993 - 2002 ( kamin, marazzi, and schindler, 2006 ) 7. however, imported goods make up only part of what people consume, and so the effect on overall inflation is less than the deceleration in the prices of imports alone. typical estimates of the short - term effect on the overall inflation rate of less - rapid increases in the prices of imports stemming from trade with china are in the neighborhood of 0. 1 percent or less per year – a discernable but certainly not a large effect. this result requires several qualifications. first, the direct effect of lower import prices on overall consumer price inflation could understate the overall effect, if lower import prices force competing domestic firms to restrain their prices as well. research has generally found that import prices do affect the prices charged by domestic producers. 8 for example, the international monetary fund found that, in a range of industrial economies, the prices of domestic products were restrained by competition from imports, the effect being larger with greater penetration ( imf, 2006 ). to the extent that import competition slows the rate of increase of domestic prices, the tendency of lower - cost imports to reduce domestic inflation will be enhanced. on the other hand, not all aspects of globalization and trade reduce inflation. for example, globalization has been associated with strong growth in some large emerging - market economies, notably china and india, and this growth likely has contributed to recent