Swiss National Bank (SNB) Chairman Thomas Jordan said that given the latest inflation forecasts, Central Bank policymakers do not see the need for further interest rate increases to maintain price stability, which defines as inflation in the range of 0-2%.
According to official data from the Federal Statistical Office (FSO), in December consumer prices rose by 1.7% per year after increasing by 1.4% per year (lowest rate since October 2021) in November. Economists expected an increase of 1.5% per annum. Average annual inflation was +2.1% in 2023. On a monthly basis, consumer prices remained unchanged after falling 0.2% in November. Consensus estimates suggested a 0.2% drop. Core inflation - excluding fresh and seasonal products, energy and fuel - increased by 0.2% on a monthly basis and by 1.5% per year.
Last month, the Central Bank lowered its forecast price rises to a level of 1.9% in 2024 and 1.6% in 2025 - both within its target range.
Jordan stated that although the inflation situation has improved compared to last year, the battle against inflation has not yet been fully won. Meanwhile, he declined to say when an interest rate cut might occur.
The SNB Chairman also acknowledged the impact of the strengthening of the national currency on the Swiss economy, especially on exporters, saying that the growth of the franc creates problems for many companies. He added that the SNB had reacted to the situation by no longer focusing on foreign currency sales.