SNB lowered its policy rate by 25 bps to 0.00%, as widely expected. The move came as inflation pressures continue to ease and growth momentum slows following a front-loaded export boost in Q1. SNB noted that its conditional inflation forecast has been revised downward for 2025 and 2026, but still sees average inflation staying well within its price stability range through the forecast horizon.
The new projections put inflation at just 0.2% in 2025 (down from 0.4%), 0.5% in 2026 (down from 0.8%) and 0.7% in 2027 (down slightly from 0.8%). These figures assume that the policy rate remains at zero throughout the period. SNB said that without today’s cut, the forecast would have been even lower.
On the growth side, SNB acknowledged that the strength in Q1 GDP was driven largely by a pull-forward of US-bound exports — a pattern mirrored in other economies. When adjusted for these front-loaded flows, underlying momentum was “more moderate”.. As a result, growth is expected to slow again and remain “rather subdued” over the remainder of the year. SNB projected GDP to rise just 1% to 1.5% this year and next.
