The Swiss National Bank left its policy rate unchanged at 0%, as widely expected, while upgrading its inflation forecasts after higher energy prices and a weaker franc lifted the price outlook. Inflation rose from 0.6% in May to 0.8% in August, with the increase driven mainly by oil products as goods inflation turned positive for the first time since May 2024. Even so, the SNB said medium-term inflationary pressure had increased only slightly and judged current monetary policy appropriate for maintaining price stability.
The conditional inflation forecast was raised across the horizon. The SNB now expects average inflation of 0.7% in 2026, 0.8% in 2027 and 0.8% in 2028, compared with 0.6%, 0.6% and 0.7% respectively in June. The near-term upgrade reflects stronger-than-expected oil-product prices, while the weaker Swiss franc contributed to the modest upward revision further out. However, the SNB still expects energy inflation to fall during 2027, and the entire forecast remains within its price-stability range assuming the policy rate stays at 0%.
The broader assessment also gave little indication of an imminent policy shift. The SNB expects 2026 GDP growth of 1.5–2.0% and around 1.5% in 2027, while noting that exceptionally strong second-quarter growth overstated underlying momentum because of the chemicals and pharmaceuticals sector. It also described the recent depreciation of the franc as supportive for the economy and repeated that it remains willing to intervene in the foreign-exchange market as necessary. Overall, the statement points to slightly firmer inflation pressure but no clear need to move away from a 0% policy rate for now.
Data Summary
| Indicator | Previous | Current |
|---|---|---|
| SNB Policy Rate | 0.00% | 0.00% |
| CPI Inflation | 0.6% (May) | 0.8% (Aug) |
| 2026 Inflation Forecast | 0.6% | 0.7% |
| 2027 Inflation Forecast | 0.6% | 0.8% |
| 2028 Inflation Forecast | 0.7% | 0.8% |
The SNB kept the policy rate at 0%, while lifting its inflation path as higher oil-product prices raised the near-term outlook and the weaker Swiss franc added somewhat to medium-term inflation pressure.
Economic Outlook
| Indicator | Latest SNB Assessment |
|---|---|
| 2026 GDP Growth | 1.5–2.0% |
| 2027 GDP Growth | Around 1.5% |
| Medium-term inflation pressure | Increased only slightly |
| FX policy | Willing to be active as necessary |
| Main global risk | Middle East / higher energy prices |
The SNB described underlying Swiss growth as solid but expects moderation ahead, while highlighting the Middle East and energy prices as major sources of uncertainty.
Key Takeaways
- The SNB held its policy rate at 0%, with no indication that an immediate policy change is necessary.
- Inflation rose from 0.6% in May to 0.8% in August, largely because of higher oil-product prices.
- The inflation forecast was revised higher across the horizon, to 0.7% in 2026, 0.8% in 2027 and 0.8% in 2028.
- The near-term upgrade mainly reflects higher-than-expected oil prices, while the weaker Swiss franc contributed to the modest increase in the medium-term forecast.
- Despite the upgrades, the SNB said medium-term inflation pressure has increased only slightly, and the entire forecast remains within its price-stability range.
- The SNB expects elevated energy inflation to fade during 2027, limiting the case for reacting aggressively to the current oil-driven increase.
- Growth is expected to moderate, with 2026 GDP growth of 1.5–2.0% and around 1.5% in 2027.
- The SNB retained its willingness to intervene in the foreign-exchange market, while noting that the recent franc depreciation is already supporting economic activity.
