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Main Points
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✅Inflation will ease faster than previously estimated.
Inflation has risen slightly since the last monetary policy assessment, and stood at 1.4% in May. Higher inflation in rents, tourism services and oil products has contributed in particular to this increase. Overall, inflation in Switzerland is currently being driven above all by higher prices for domestic services.
Taking into account today’s policy rate cut, the new conditional inflation forecast is similar to that of March. Over the longer term, it is slightly below the previous forecast. The forecast puts average annual inflation at 1.3% for 2024, 1.1% for 2025 and 1.0% for 2026
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✅GDP will remain moderate at around 1%
Swiss GDP growth was moderate in the first quarter of 2024. The services sector continued to expand, while value added in manufacturing stagnated. There was a further slight increase in unemployment. Growth is likely to remain moderate in Switzerland in the coming quarters. The SNB anticipates GDP growth of around 1% this year.
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✅Labor will rise slightly
In this environment, unemployment is likely to continue to rise slightly, and the utilsation of production capacity is set to decline slightly. —
✅Rates – no info on the possibility of next cut.