Swiss National Bank Holds Policy Rate Steady Amidst Stable Inflation Outlook

The Swiss National Bank (SNB) has opted to maintain its policy rate at 0%, reflecting a cautious approach in response to recent economic conditions and inflation trends. This decision comes as inflation in Switzerland has been slightly lower than anticipated, declining to 0.0% in November, with subdued price increases particularly noted in the hotel, rental, and clothing sectors.

While short-term inflation forecasts have been revised downward, the SNB emphasizes that medium-term inflationary pressures remain virtually unchanged. Their projections place average annual inflation at 0.2% for 2025, 0.3% for 2026, and 0.6% for 2027, all within the central bank’s price stability range. The SNB also expressed a continued willingness to intervene in foreign exchange markets if necessary to support these goals.

Globally, economic growth exceeded expectations in the third quarter despite ongoing trade policy uncertainties, with notable investment in technology sectors like artificial intelligence. In Switzerland, however, GDP contracted in the third quarter, largely due to shifting activity in the pharmaceuticals sector. Nevertheless, the economic outlook has improved slightly, as reduced US tariffs and a more favorable global environment bolster the prospects for modest growth—predicted at just under 1.5% in 2025 and around 1% in 2026. Unemployment is expected to rise somewhat, reflecting the still-tepid overall activity.

The SNB underlined its readiness to adapt policy as conditions evolve, reiterating that its accommodative stance is intended to gradually support higher inflation and foster stable economic development. This steady-handed approach signals the central bank’s ongoing commitment to maintaining price stability while supporting Switzerland’s recovery in an uncertain global context.