There has also been a slump in expectations regarding export momentum since February, with almost no respondents seeing the prospects for the Swiss export sector improving over the coming six months. 

One possible contributory factor in this regard is that most survey participants do not believe the supply chain difficulties will ease completely. Sixty per cent of analysts expect long-lasting restrictions on the supply chain. Furthermore, the expectation that the Swiss franc will continue to appreciate will also not help the export sector, the bank said in a statement.

Nevertheless, the labour market seems to be defying the weakness in exports. The consequences for employment that analysts were expecting remain muted and have not deteriorated materially since April, which is a good signal for consumer spending and could limit the extent of the economic slowdown.

Recession
Meanwhile, the barometer shows that the risk of a recession has increased across all regions of the world. The likelihood of a recession in Switzerland has now climbed to 40 per cent, 48 per cent in China and 50 per cent in the US, the firm said.  A recession in the euro area almost seems to be a foregone conclusion, as the analysts forecast this with 70 per cent probability.

The analysts surveyed are especially pessimistic when it comes to the European stock market. While they expect renewed losses in all of the major equity indices over the next six months, the share of survey participants who anticipate falling share prices is highest for the EuroStoxx 50. 

Overall, the analysts’ sentiment towards the equity markets is the lowest it has ever been in the history of the financial market survey, the firm said. 

Inflation 
Nevertheless, the analysts’ short-term inflation projections have stabilised slightly after plunging a month earlier. 

Conversely, the analysts’ long-term inflation expectations are now slightly more aligned, the firm said. Two-thirds of the survey participants expect inflation to be within the SNB’s target range five years from now. The average inflation forecast for this period has also declined. On a five-year horizon, the analysts expect the annual inflation rate to average 1.73 per cent, down from 1.87 per cent in June.