"Volkswirtschaftsmonitor" Q4/2024

The trend of the US economy growing faster than the eurozone economy continued in the third quarter of 2024 and is also reflected in the forecasts for 2025. For Liechtenstein, weak external demand from the eurozone in particular, especially from Germany, is having a negative impact on the economy. These developments are having an increasing impact on the labor market, although unemployment in Liechtenstein remains at a low level. Liechtenstein's banking sector is proving to be robust, but the cost/income ratio remains high by international standards, even relative to Swiss peer banks. Core inflation is proving to be stubborn in both the USA and the eurozone and remains above the central banks' target values. In Switzerland, interest rate expectations are already negative in the coming year against the backdrop of the significant decline in inflation. Equity markets remain highly valued, which also implies a high vulnerability to corrections in view of the continuing high level of economic policy uncertainty in the US.

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