Monetary policy assessment of 21 September 2023
Central bank: snb | Type: statement | Date: 2023-09-21

Monetary policy assessment of 21 September 2023
tightening of monetary policy over recent quarters is countering remaining inflationary
pressure. From today’s perspective, it cannot be ruled out that a further tightening of
monetary policy may become necessary to ensure price stability over the medium term. The
SNB will therefore monitor the development of inflation closely in the coming months. To
provide appropriate monetary conditions, the SNB is also willing to be active in the foreign
exchange market as necessary. In the current environment, the focus is on selling foreign
Banks’ sight deposits held at the SNB will continue to be remunerated at the SNB policy rate
of 1.75% up to a certain threshold. Sight deposits above this threshold will be remunerated at
an interest rate of 1.25%, and thus still at a discount of 0.5 percentage points relative to the
SNB policy rate.
Inflation has declined further in recent months, and stood at 1.6% in August. This decrease
was above all attributable to lower inflation on imported goods and services.
The new conditional inflation forecast is based on the assumption that the SNB policy rate is
1.75% over the entire forecast horizon (cf. chart 1). In the medium term, the new forecast is
somewhat below that of June, mainly due to the economic slowdown and slightly lower
inflationary pressure from abroad. The inflation forecast puts average annual inflation at 2.2%
for 2023 and 2024, and at 1.9% for 2025 (cf. table 1). It is thus just within the range of price
stability at the end of the forecast horizon.
Global economic growth was moderate in the second quarter of this year. Although inflation
continued to decline in many countries, it remains clearly above the respective targets.
Against this background, numerous central banks tightened their monetary policy further
during the last quarter, albeit at a slower pace than in the previous quarters.
21 September 2023
Press release
The growth outlook for the global economy in the coming quarters remains subdued. At the
same time, inflation is likely to remain elevated worldwide for the time being. Over the
medium term, however, it should return to more moderate levels, not least due to more
restrictive monetary policy.
This scenario for the global economy remains subject to large risks. In particular, the high
inflation in some countries could be more persistent than expected, necessitating a further
tightening of monetary policy there. Equally, the energy situation in Europe could deteriorate
again in Q4 2023 and Q1 2024. A pronounced slowdown in the global economy therefore
cannot be ruled out.
Swiss GDP stagnated in the second quarter of 2023. The services sector once again grew
solidly, while value added in manufacturing contracted significantly. The labour market
remained robust, and utilisation of overall production capacity continued to be above average,
albeit only slightly.
Growth is expected to remain weak for the rest of the year. Subdued demand from abroad, the
loss of purchasing power due to inflation, and more restrictive financing conditions are having
a dampening effect. Overall, Switzerland’s GDP is likely to grow by around 1% this year. In
this environment, unemployment will probably continue to rise slightly, and the utilisation of
production capacity is likely to decline somewhat.
The forecast for Switzerland, as for the global economy, is subject to high uncertainty. The
main risk is a more pronounced economic slowdown abroad.
Momentum on the mortgage and real estate markets has weakened noticeably in recent
quarters. However, the vulnerabilities in these markets remain.
More detailed information on the monetary policy decision can be found in the
introductory
remarks of the Governing Board.
21 September 2023
Press release