The coronavirus pandemic is continuing to have a strong adverse effect on the economy.

Against this difficult backdrop, the SNB is maintaining its expansionary monetary policy with a view to stabilising economic activity and price developments.

In light of the highly valued Swiss franc, the SNB remains willing to intervene more strongly in the foreign exchange market.

Furthermore, it is supplying generous amounts of liquidity to the banking system via the SNB COVID-19 refinancing facility. 

The SNB’s expansionary monetary policy provides favourable financing conditions, counters upward pressure on the Swiss franc, and contributes to an appropriate supply of credit and liquidity to the economy.

In the current situation, the inflation outlook remains subject to high uncertainty. 

The new conditional inflation forecast through to the end of 2021 is slightly lower than in September. This is primarily due to the renewed deterioration in the economic situation as a result of the second wave of the pandemic. 

The forecast for 2020 is negative (−0.7%). The inflation rate is likely to be higher again next year (0.0%) and slightly positive in 2022 (0.2%). The conditional inflation forecast is based on the assumption that the SNB policy rate remains at −0.75% over the entire forecast horizon.

Momentum is likely to be weak in Q4 2020 and Q1 2021.

The SNB expects that GDP will shrink by around 3% this year. 

SNB expects GDP growth of 2.5% to 3% for 2021.