SNB remains willing to be active in the foreign exchange market as necessary.
Inflationary pressure in Switzerland has again decreased significantly compared to the previous quarter.
SNB’s easing of monetary policy today takes the reduction in inflationary pressure into account.
Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term.
Inflation in the period since the last monetary policy assessment was lower than expected, standing at 1.1% in August compared to 1.4% in May.
Overall, inflation in Switzerland is currently being driven mainly by higher prices for domestic services.
The new conditional inflation forecast is significantly lower than that of June.
The stronger Swiss franc, the lower oil price and electricity price cuts announced for next January have contributed to the downward revision.
The new forecast is within the range of price stability over the entire forecast horizon. It puts average annual inflation at 1.2% for 2024, 0.6% for 2025 and 0.7% for 2026.
The forecast is based on the assumption that the SNB policy rate is 1.0% over the entire forecast horizon.
Without today’s rate cut, the conditional inflation forecast would have been even lower.
Swiss GDP growth was solid in the second quarter of 2024.
Growth momentum in the chemicals/pharmaceuticals industry was particularly strong, while growth in many other industries was moderate.
Growth is likely to remain rather modest in Switzerland in the coming quarters due to the recent appreciation of the Swiss franc and the moderate development of the global economy.
The SNB anticipates GDP growth of around 1% this year and around 1.5% for 2025.
The forecast for Switzerland, as for the global economy, is subject to significant uncertainty.
Developments abroad represent the main risk.