Exploring Economic Trends: Insights from EMEA Recruitment’s Key Markets
Welcome to my monthly newsletter where I highlight recent economic developments across EMEA Recruitment ’s specialist regions. From Switzerland's economic forecast and competitiveness ranking to developments in the Netherlands and Sweden, this edition uncovers key updates shaping regional economies.
Additionally, if you are a senior Finance & Accountancy professional located in the Netherlands or Switzerland, I end this month's news digest by outlining some in-person events which may be of interest to you.
Switzerland
Swiss Economic Growth Forecasted to Remain Below Average in 2024, Expected to Normalise by 2025
The Federal Government Expert Group on Business Cycles forecasts that Switzerland's economic growth will be 1.2% in 2024, slightly above the previous 1.1% forecast but still below average. Growth is expected to normalise to 1.7% in 2025. The services sector and private consumption are increasing, but the industrial sector remains stagnant. Global economic recovery is uneven, affecting Swiss exports. Inflation is stable at 1.4% for 2024, with unemployment expected to rise to 2.4%. Risks include geopolitical conflicts, high core inflation, and global debt. Faster-than-expected inflation reduction could speed up economic normalisation. Overall, Switzerland faces a mix of risks and potential upsides, depending on global economic developments.
Switzerland Secures Second Place in IMD World Competitiveness Ranking with Top Scores in Government Efficiency and Infrastructure
The International Institute for Management Development (IMD) released its annual World Competitiveness Ranking report.
Switzerland ranked No.2 out of this year's 67 global economies analysed. Switzerland’s position resulted from its collective performance across four key indicators: economic performance, government efficiency, business efficiency, and infrastructure. Switzerland ranked 12th, 1st, 5th and 1st in those categories respectively with each category comprising five sub-factors. An in-depth analysis of Switzerland’s performance can accessed here.
SECO has made several recommendations for Switzerland to boost its position further. Actions include utilising labour force potential, expanding market access while enhancing competitive dynamics, and boosting entrepreneurship and innovation.
The Netherlands
Securing Stability: Challenges and Strategies in the Dutch Financial Sector
Lower inflation and a recovering economy have boosted financial stability in the Netherlands, though rising uncertainties continue to pose risks. Geopolitical tensions and persistent inflation could trigger market corrections and impact banks, insurers, and pension funds, as explained in De Nederlandsche Bank's Financial Stability Report. Geopolitical fragmentation threatens global trade, crucial for the Dutch economy, and increases cyberattack risks.
While Dutch banks remain strong, thanks to high interest rates and profits, they face potential loan quality deterioration, especially in commercial real estate. Pension funds and insurers benefit from higher rates but face risks from investments in illiquid assets like private equity and credit.
The growing role of non-bank lending underscores the need for better market information and risk management. An enhanced macroprudential policy framework is essential to address these system-wide risks, particularly for non-bank financial institutions.
领英推荐
AI Surge Poses New Challenges for Dutch Financial Regulators
The rapid development of artificial intelligence (AI) is challenging financial regulators in the Netherlands as AI's growing role in finance raises concerns about transparency, data privacy, and ethical use, as AI systems increasingly influence lending and insurance decisions. In a joint report, The Dutch Authority for the Financial Markets (AFM) and De Nederlandsche Bank (DNB) emphasise the need for dialogue within the financial industry to address these challenges. Only 25% of Dutch respondents trust AI in finance, highlighting the demand for strict supervision. DNB aims to regulate AI effectively, ensuring systems are fair and transparent. The complexity of AI algorithms and potential risks like discrimination require advanced oversight capabilities. The report also stresses the need for continuous staff training. International cooperation and robust regulatory frameworks are essential to safeguard financial stability and consumer protection.
The Nordics
Sweden Cuts Interest Rates for the First Time in Eight Years
Sweden’s central bank, the Riksbank, has reduced its main interest rate to 3.75% from 4.00%, its first cut in eight years. This contrasts with the US Federal Reserve, which is keeping rates high. Riksbank Governor Erik Thedéen signals that further cuts are a possibility. This move is part of a broader trend in Europe, with other central banks also lowering rates, and the European Central Bank may follow suit. Sweden's economy, closely tied to the EU, has been shrinking, partly due to past rate hikes that hurt house prices and spending. While a weaker krona could be problematic, lower rates are needed to manage current economic pressures.
Sweden Raises Work Permit Salary Threshold: Impact and Transition Details
Sweden has implemented a significant increase in the salary threshold for work permit applicants, raising it from 13,000 kronor to 28,480 kronor per month as of June 18, 2024. This adjustment, based on updated median salary data, aims to ensure that incoming workers meet higher income standards. There's a proposed further increase to 35,600 kronor by June 2025. The transition includes exemptions for certain workers and a grace period until June 2026 for current permit holders, maintaining the previous threshold rule during this period. Seasonal workers on short-term permits must earn at least 13,000 kronor per month, aligning with industry norms. These changes reflect Sweden's efforts to align work permit criteria with economic conditions and ensure fair compensation across sectors. Future adjustments will be tied to annual median salary updates, emphasising ongoing compliance with industry standards.
EMEA Recruitment News
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8 个月How do the economic forecasts in Switzerland and the Netherlands impact recruitment for Finance & Accountancy professionals? #EMEA #Economy.