The SNB opted to keep its policy rate at 0.00% in September, delivering the first pause since its rate-cutting cycle began in December 2023. The move matched expectations and reflects a balance between subdued inflation and a weaker growth backdrop.
The central bank noted that inflation has edged up slightly, from -0.1% in May to 0.2% in August, driven mainly by tourism and higher prices for imported goods. Still, it stressed that inflationary pressures remain broadly unchanged since June, with the conditional forecast holding within its definition of price stability across the “entire forecast horizon”. Annual inflation is projected at 0.2% in 2025, 0.5% in 2026, and 0.7% in 2027, assuming interest rates stay at 0%.
However, the SNB warned that the economic outlook has worsened due to “significantly higher US tariffs.” It said the measures are expected to weigh on exports and investment, with the machinery and watchmaking sectors particularly exposed. As a result, the SNB maintained its GDP forecast of 1–1.5% growth for 2025 but downgraded expectations for 2026 to just under 1%.
