SNB cuts its Policy Rate by 25bps as expected to 1.00%; prepared to intervene in the FX market as necessary; Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term.

INFLATION FORECASTS

• 2024 1.2% (prev. 1.3%)
• 2025 0.6% (prev. 1.1%)
• 2026 0.7% (prev. 1.0%)
• The stronger Swiss franc, the lower oil price and electricity price cuts announced for next January have contributed to the downward revision.
• The forecast is based on the assumption that the SNB policy rate is 1.0% over the entire forecast horizon. Without today’s rate cut, the conditional inflation forecast would have been even lower.
• The stronger decline in inflation also means that weaker second-round effects are expected in the medium term. The new forecast is within the range of price stability over the entire forecast horizon

GROWTH FORECASTS

• 2024 1.0% (prev. 1.0%)
• 2025 1.5% (prev. 1.5%)