2023-09-21 08:35:16
The Swiss National Bank (SNB) left its key rate unchanged at 1.75% on Thursday, defying analysts’ predictions. However, future increases cannot be ruled out if this is necessary to ensure price stability in the medium term, the issuing body said.
After five rate increases decided since July 2022, the SNB opted for the monetary status quo, believing that it had succeeded in countering “persistent inflationary pressure”. In recent months, inflation has indeed continued to slow. In August, it stood at 1.6%, recalls the guarantor of price stability, which is in line with the SNB’s objective of a price increase of between 0% and 2%. The decline is mainly due to a decline in the price of imported goods and services.
In June, inflation in Switzerland fell below 2% for the first time since January 2022.
>> The evolution of the consumer price index (OFS until August 2023)
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Raising interest rates involves slowing down economic activity by reducing the liquidity available on the markets. But there is a risk of slowing growth and creating unemployment.
Furthermore, the Swiss National Bank (SNB) on Thursday renewed its inflation forecasts for the current year and the next, as part of its quarterly review of the country’s economic and monetary situation. The increase in prices must reach 2.2% in 2023, as in 2024. The first estimate for 2025 shows inflation of 1.9%, just within the price stability range established by the issuing institute. .
Growth expectations are unchanged. The gross domestic product (GDP) must therefore always increase by around 1% over the whole year. The economic sluggishness risks resulting in a modest increase in unemployment, accompanied by a slight decline in the use of production capacities.
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