The inflation forecast published by the National Bank in December 2000 predicted that, at an unchanged interest rate of 3.5%, inflation would increase somewhat in the course of 2001 and slightly exceed 2% for a limited period of time. This forecast was based on a background of robust economic growth in 2000 and the massive rise in oil prices. At the same time, the National Bank noted that the gradual tightening of Switzerland’s monetary policy from autumn 1999 until summer 2000 and the anticipated economic slowdown in the US and Europe would help prevent an inflationary overheating of the Swiss economy. For 2001 and 2002, the National Bank projected real economic growth to slow to 2.2% and 1.6% respectively.
