With today’s interest rate cut, the SNB has postponed—but not ruled out—a return to negative interest rates.

The key interest rate has been reduced by 25 basis points to 0 percent. Inflationary pressures have declined compared to the previous quarter, the central bank stated in its release. «With today’s monetary policy easing, the National Bank is responding to lower inflationary pressure. The SNB will continue to monitor the situation closely and adjust monetary policy if necessary to ensure that inflation remains within the range of price stability over the medium term.»

The SNB also reaffirmed its stance that it remains prepared to intervene in the foreign exchange market if needed.

Inflation Continues to Decline

Since the last assessment, inflation has continued to fall. It declined to -0,1 percent in May, down from 0,3 percent in February.

Inflation Expectations Slightly Lower

The SNB's inflation forecast is now slightly lower in the short term and virtually unchanged in the medium term. Over the entire forecast horizon, inflation remains within the price stability range. The SNB expects average annual inflation to be:

0,l2 percent for 2025

0,5 percent for 2026

0,7 percent for 2027

The central bank also noted that uncertainty surrounding the global economic outlook remains high. Developments abroad continue to represent the main risk to Switzerland’s economic prospects.

Economic Growth and Outlook

Switzerland’s gross domestic product (GDP) grew strongly in the first quarter of 2025. «However, this development was largely driven by early exports to the United States, as observed in other countries as well. Adjusted for these effects, the growth dynamic is more moderate,» the SNB noted.

Growth is expected to slow down and remain modest over the rest of the year. For the full year 2025 and the following year, the SNB projects GDP growth of 1 to 1,5 percent. Unemployment is expected to increase slightly going forward, the statement added.