The Swiss National Bank (SNB) reduced its key policy rate by 50 basis points to 0.5% in December 2024, surpassing market expectations of a 25 basis point cut.
SNB cuts rate by 50 basis points
This marks the fourth consecutive rate cut and the sharpest since January 2015, lowering borrowing costs to their lowest level since November 2022. The move comes amid easing inflation, which fell from 1.1% in August to 0.7% in November due to declining costs for domestic services, oil, and food. Inflation is projected to average 1.1% in 2024, 0.3% in 2025, and 0.8% in 2026, remaining within the SNB’s target range.
Swiss GDP to grow by 1% this year
Swiss GDP is anticipated to grow by approximately 1% this year, with a slight improvement to 1–1.5% in 2025, supported by the recent rate reductions. However, the economic outlook faces challenges, including rising unemployment, slowing production, and global uncertainties such as geopolitical tensions and unclear policy directions abroad.
