Report for the attention of the Governing Board of the Swiss National Bank for its quarterly monetary policy assessment of December 2025

The report describes economic and monetary developments in Switzerland and explains the inflation forecast. It shows how the SNB views the economic situation and the implications for monetary policy it draws from this assessment.

Key points

• On 11 December 2025, the SNB decided to leave its policy rate at 0%. Inflationary pressure in the medium term was virtually unchanged compared to the previous quarter. The monetary policy helps to keep inflation within the range consistent with price stability and supports economic development.
• Global economic growth was stronger than expected in the third quarter of 2025. Although US tariffs and trade policy uncertainty weighed on the global economy, economic development in many countries has thus far remained more resilient than had been assumed.
• Swiss GDP contracted in the third quarter. This was mainly due to a further decline in value added in the pharmaceuticals industry, following a strong rise in the first quarter. The economic outlook for Switzerland has improved slightly with the reduction in US tariffs agreed in November and somewhat better economic development abroad. Growth is expected again in the coming quarters.
• Inflation in Switzerland fell from 0.2% in August to 0.0% in November. Lower inflation in the hotel industry, as well as for rents and clothing, contributed in particular to this decline. Inflation expectations were largely unchanged and within the range consistent with price stability.
• Yields on long-term Confederation bonds rose marginally from mid-September. The Swiss franc depreciated slightly in trade-weighted terms. Prices for Swiss shares and residential real estate increased. Growth in mortgage lending continued to rise, while growth momentum in the broad monetary aggregates stabilised.

Business cycle signals

Results of the SNB company talks
Fourth quarter of 2025

Report submitted to the Governing Board of the Swiss National Bank for its quarterly monetary policy assessment. The appraisals presented here are based on discussions between the SNB's delegates for regional economic relations and members of management at companies throughout Switzerland. In its evaluation, the SNB aggregates and interprets the information received.

Key points

• According to the talks with company representatives, growth momentum in the Swiss economy has increased slightly in the fourth quarter. The services sector and construction continue to record solid growth in turnover, and parts of manufacturing also report a certain upturn in what has until now been weak momentum.
• Despite the improved economic momentum, personnel and technical capacity in manufacturing are still significantly underutilised. Owing to the low capacity utilisation, profit margins are under pressure. Companies cite US tariffs and the strong Swiss franc as additional challenges.
• Companies strongly affected by US tariffs are responding with a range of measures, including in individual cases the relocation of steps in the manufacturing process to the US, something that was barely mentioned in the previous quarter.
• Wage growth has weakened slightly. The companies visited expect average wage growth of 1.3% in 2026, down from 1.6% this year.
• Companies’ expectations with regard to turnover are cautiously positive. Despite the agreed reduction in US tariffs, uncertainty among companies remains high.