Report for the attention of the Governing Board of the Swiss National Bank for its quarterly monetary policy assessment of March 2026

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 19 March 2026, the SNB decided to leave its policy rate at 0%. Medium-term inflationary pressure has remained virtually unchanged since mid-December. The monetary policy helps to keep inflation within the range consistent with price stability and supports economic development. Given the conflict in the Middle East, the SNB’s willingness to intervene in the foreign exchange market has increased.
• Global economic growth was solid in the fourth quarter of 2025. However, due to the conflict in the Middle East and the increase in energy prices, growth is likely to slow somewhat in the short term, and inflation is likely to rise.
• Swiss GDP grew again in the fourth quarter of 2025, having contracted in the previous quarter. Nevertheless, the economic outlook for the coming months is uncertain. Growth could be rather subdued in the short term. However, an upturn is to be expected in the medium term. The SNB expects GDP growth of around 1% for 2026 and around 1.5% for 2027.
• IInflation in Switzerland rose from 0.0% in November 2025 to 0.1% in February 2026. This increase was driven in particular by higher goods inflation. Inflation expectations were largely unchanged and within the range consistent with price stability.
• The economic outlook globally and for Switzerland has become considerably more uncertain against the backdrop of the conflict in the Middle East.
• The yield curve for Confederation bonds shifted slightly upwards from mid-December. The Swiss franc appreciated significantly. Prices on the Swiss stock market declined somewhat. Residential real estate prices continued to rise. Growth momentum in the broad monetary aggregates and in mortgage lending stabilised.

Business cycle signals

Results of the SNB company talks
First quarter of 2026

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, the Swiss economy grew solidly at the beginning of the year. Services companies continued to record robust turnover growth, and in manufacturing the signs of a slight upturn that had already been observed in the previous quarter were confirmed.
• In manufacturing, the utilisation of technical capacity remains significantly below normal levels. Although low utilisation and the strength of the Swiss franc are weighing on margins, the situation has improved somewhat. Manufacturing companies attribute this above all to declines in staffing levels, but in some cases also to the reduced US tariffs.
• Companies are optimistic about the development of their business and anticipate robust increases in turnover in the next two quarters. The information received after the escalation in the Middle East suggests that the majority of companies are adhering to their expectations. Some directly affected companies are significantly lowering their expectations, however. Uncertainty is considered to be high.
• Companies are finding it comparatively easy to recruit staff at present and staffing levels are more or less in line with their requirements.
• Many companies are investing in projects involving artificial intelligence (AI) and are anticipating efficiency gains in the coming years. However, the majority of companies report that the use of AI is not currently reducing their need for staff.