– The SNB reduces its rate to 1%
Faced with the decline in inflation observed during the past quarter, the SNB announced a reduction of 25 basis points in its main key rate.
ALE
Published: 09/26/2024, 5:14 p.m.
SNB headquarters in Zurich.
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The Swiss National Bank (SNB) announced a reduction in its key rate by 25 basis points, bringing it to 1%. This decision, which will come into force on September 27, 2024, comes against a backdrop of falling inflationary pressure in Switzerland, marked by a significant appreciation of the Swiss franc over the last three months.
Inflation in Switzerland fell more quickly than expected, reaching 1.1% in August compared to 1.4% in May. This slowdown is mainly explained by the drop in prices of imported goods and services. However, Swiss services continue to see their prices increase, maintaining a certain inflationary pressure on the domestic market.
The SNB indicated that further rate cuts may be necessary in the coming months to ensure price stability in the medium term. According to its forecasts, inflation should remain moderate with an annual average of 1.2% in 2024, before falling to 0.6% in 2025 and 0.7% in 2026.
Despite moderate growth in the global economy and continued geopolitical uncertainty, Switzerland recorded solid GDP growth in the second quarter of 2024, notably thanks to the chemical and pharmaceutical sector. The mortgage and real estate markets recorded weaker growth than in previous years.
The SNB forecasts GDP growth of around 1% for 2024, with a slight increase in unemployment expected in the coming quarters. For 2025, the institution expects growth of 1.5%.
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