Information unaudited Information ungeprüftEconomic environment
A bankʼs development is closely tied to the economic environment, as its business activities are strongly influenced by the broader economic situation. Here is a look back at the underlying conditions in the 2025 financial year.
The greatest challenge for the global economy was the volatile US tariff policy and the uncertainty it created. Nevertheless, the global economy performed surprisingly well. None of the major economies slipped into recession. Overall, global economic performance was only slightly below the forecasts made at the beginning of the year.
US policy with significant consequences
Despite the highest US tariffs in several decades, the US economy is on track to grow by around 2 per cent. However, the sharp decline in the value of the dollar shows that the chaotic policy has not been without consequences. The drop is a clear sign of growing mistrust towards the United States. For Swiss franc investors, this has resulted in a significant reduction in the returns generated from dollar-denominated investments.
The Eurozone economy was able to withstand the impact of US tariffs thanks to strong domestic demand, but economic momentum remained weak after a strong first quarter. The same was true for the Swiss economy.
The growing uncertainty caused by the policies of the new US administration made it clear to Europe that it must be capable of ensuring its own security. This prompted plans to increase military spending. Germany went a step further: in the spring, the newly elected German government announced extensive investment aimed at revitalising and renewing the countryʼs stagnating economy.
Divergent growth in Asia
China was still grappling with the aftermath of the burst real estate bubble. Domestic demand remained weak, yet the economy still achieved the governmentʼs growth target of 5 per cent. In contrast, India continued to experience consistently strong growth.
Inflation rates generally began to ease. However, in many countries they remained well above the central banksʼ target levels. Only in Switzerland, by contrast, it was not high inflation that troubled the National Bank, but rather inflation that was too low.
Easing of monetary policy – with one exception
Most central banks around the world eased their monetary policy. The Swiss National Bank cut interest rates twice, lowering the key rate to 0 per cent. In the Eurozone, the key rate fell by 100 basis points, and in the United States by 75 basis points. Among the industrialised nations, only the Bank of Japan defied the global trend and raised its key rate.
Bond returns varied depending on the market. The US market performed very well thanks to high interest rates, while bonds denominated in euros and Swiss francs brought little joy. In euros, a sharply rising German yield curve dampened returns, while in Swiss francs, bonds were less attractive due to the low interest rate environment.
Stock markets after tariff escalation and AI euphoria
Following two strong years for equities, market performance in 2025 was again very positive – despite how the situation looked in the spring: in April, the US president triggered a significant market correction by announcing steep tariffs. A subsequent de-escalation in trade policy led to a recovery.
In the second half of the year, markets brushed off the tariff concerns, and the theme of AI – artificial intelligence – gave share prices a substantial boost. For once, however, the US market was not the top performer. It lagged behind European markets and, in particular, emerging market equities.
Gold as the clear winner
Gold had an exceptionally good year. The precious metal benefited from global uncertainty, delivering a return of nearly 70 per cent – several times higher than that of equities.