ZURICH (Reuters) – The Swiss National Bank expects inflation to rise, Chairman Thomas Jordan said in an interview to be broadcast later on Monday.
The SNB has been broadly successful in tackling Swiss inflation through a combination of interest rate hikes and also by relying on the high value of the Swiss franc to reduce the price of imported products
“We have VAT going up, we have rents going up again and also electricity prices – that all suggests that inflation will go up again, but it shouldn’t go above 2%,” Jordan told Swiss broadcaster SRF.
Inflation was 1.7% in December, the seventh consecutive month that price rises have remained within the SNB’s target range of 0% to 2%.
Jordan said it was too early to say whether the fight against inflation had been won, but he said the situation was significantly better and “looks pretty good.”
He said inflation is expected to be just under 2% in 2024.
The Swiss economy is expected to slow this year, with the high value of the Swiss franc expected to be an additional problem for exporters already dealing with weaker demand from the euro zone.
Markets currently expect the SNB to cut interest rates by 25 basis points from the current 1.75% at its next meeting on March 21.
Another 25 basis point cut is also expected at the central bank’s second meeting in June.
(Reporting by Noele Illien and John Revill; Editing by Chris Reese and Jane Merriman)
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