Inflationary pressure has decreased slightly over the past quarter. However, uncertainty remains high.
The SNB will continue to monitor the development of inflation closely, and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
The SNB is also willing to be active in the foreign exchange market as necessary.
Inflation is likely to increase again somewhat in the coming months due to higher electricity prices and rents, as well as the rise in VAT.
The new conditional inflation forecast is below that of September. In the short term, this is due to the recent lower-than-expected inflation.
Over the entire forecast horizon, the inflation forecast is within the range of price stability.
The forecast puts average annual inflation at 2.1% for 2023, 1.9% for 2024 and 1.6% for 2025.
The forecast is based on the assumption that the SNB policy rate is 1.75% over the entire forecast horizon.
Global economic growth was stronger than expected in the third quarter of this year.
Inflation has declined significantly in most countries in recent months.
With inflation still above the respective targets, monetary policy is likely to remain restrictive in many countries for the time being.
The growth outlook for the global economy in the coming quarters remains subdued.
Inflationary pressure is likely to continue to ease.
This scenario for the global economy is still subject to large risks.
Inflation could remain elevated for longer in some countries, necessitating a further tightening of monetary policy there.
Swiss GDP growth is likely to be weak in the coming quarters.
Subdued demand from abroad and the tighter financing conditions are having a dampening effect.
Overall, Switzerland’s GDP is likely to grow by around 1% this year.
For 2024, the SNB currently expects growth of between 0.5% and 1%.
In this environment, unemployment is likely to continue to rise gradually, and the utilization of production capacity should decline somewhat further.
The forecast for Switzerland, as for the global economy, is subject to high uncertainty. The main risk is a more pronounced economic slowdown abroad.