SNB Holds Policy Rate at 0%

The Swiss National Bank left its policy rate at 0% in its final meeting of the year and maintained the 0.25-percentage-point charge on sight deposits above the set threshold. It also reaffirmed its readiness to intervene in the foreign exchange market if needed. Inflation remained subdued, slipping to 0.0% in November from 0.2% in August due to lower prices for hotels, rents, and clothing. Assuming no change in the policy rate, the SNB expects inflation at 0.2% in 2025, 0.3% in 2026, and 0.6% in 2027. Meanwhile, Swiss GDP contracted in Q3, mainly reflecting a correction in pharmaceuticals after front-loaded exports to the US, while other industries and services posted slight gains. The SNB now sees GDP growth near 1.5% in 2025, slightly above its earlier range of 1% to 1.5%, and around 1% in 2026, compared with its previous projection of just under 1%. It also expects a modest increase in unemployment as overall economic momentum remains muted.

The Swiss National Bank left its policy rate unchanged at 0%, maintaining the 0.25 percentage point discount on sight deposits above the set threshold, and reaffirmed its readiness to intervene in foreign exchange markets if needed. Inflationary pressure remains subdued, with inflation edging up to 0.2% in August from -0.1% in May, driven mainly by tourism and imported goods. The SNB projects inflation at 0.2% in 2025, 0.5% in 2026, and 0.7% in 2027, assuming the policy rate stays at 0%. Global growth slowed in early 2025, weighed down by US tariffs and uncertainty, with the SNB expecting subdued expansion ahead. In Switzerland, GDP growth softened to 0.5% in Q2 after a strong Q1 boosted by pharmaceutical exports. Higher US tariffs are set to dampen exports and investment, particularly in machinery and watchmaking, while services remain resilient. The SNB forecasts 1–1.5% GDP growth in 2025, slowing to just under 1% in 2026, with unemployment expected to rise further.

The Swiss National Bank (SNB) cut its policy rate by 25 bps to 0% in June 2025, as expected, setting borrowing costs at zero for the first time since negative rates in late 2022. The move came amid easing inflationary pressures and a weakening global economic outlook. Consumer prices in Switzerland fell by 0.1% in May, marking the first decline in four years, mainly driven by lower prices in tourism and oil products. The SNB now projects average inflation at 0.2% for 2025, 0.5% for 2026, and 0.7% for 2027. Swiss GDP also posted strong growth in the first quarter of 2025, partly supported by early exports to the US ahead of new tariffs, although underlying momentum was more modest. Growth is expected to slow in the coming quarters, with GDP expansion forecast at 1% to 1.5% for both 2025 and 2026. Meanwhile, the global outlook has deteriorated due to rising trade tensions, adding further uncertainty to Switzerland’s trade prospects.