SNB Chair Martin Schlegel indicated that “further interest rate reductions” might be necessary in the coming quarters to uphold “price stability” over the medium term.
At an event overnight, Schlegel highlighted that SNB’s current priority is to “normalize monetary policy” carefully, ensuring it does not become “too restrictive.”
Looking at the inflation outlook, Schlegel shared an optimistic view, noting that SNB’s forecasts show inflation remaining within “the area of price stability” in the long term. SNB projects average inflation rates of 1.2% for 2024, followed by 0.6% in 2025, and 0.7% in 2026.
However, the economic growth forecast remains modest, with Swiss GDP expected to grow about 1% this year. Schlegel cautioned that growth will likely be “muted” over the next few quarters, though he anticipates a “step-by-step improvement” in the medium term.
