The country with almost no price increases was named
5 May 21:07
Inflation in Switzerland has fallen to 0%. This is reported by "Komersant Ukrainian" with reference to the WSJ.
According to data published by the Federal Statistical Office, in April 2025, the Swiss economy came close to deflation, and consumer prices recorded zero annual inflation, compared to 0.3% in March.
Although some sectors, such as clothing, food, and air travel, saw moderate price increases, they were offset by a marked decline in accommodation and domestic tourism, pushing overall inflation into negative territory.
These developments have increased market expectations that the Swiss National Bank (SNB) will respond by cutting the rate at its June meeting.
Analysts expect the SNB to cut its key policy rate from the current 0.25% to 0%, which would be the first such move since the end of the negative rate regime in 2022. Some observers speculate that if downward inflationary pressures persist, the central bank may even return to the negative interest rate policy it followed from 2014 to 2022 in an effort to curb the Swiss franc’s excessive appreciation.
The renewed urgency is partly due to the recent sharp rise in the value of the Swiss franc. The currency has appreciated sharply against the US dollar, largely driven by global investor demand for safe-haven assets. This demand has been strengthened by escalating trade tensions and tariff threats by US President Donald Trump, which have brought a new round of volatility to global markets.
A stronger franc, while beneficial to Swiss importers and domestic consumers, puts significant pressure on the country’s exporters and risks importing deflation through cheaper foreign goods.
“There is a growing consensus among investors that the SNB needs to act quickly to prevent the economy’s competitiveness from being undermined by a stronger franc,” said a senior currency strategist at UBS.
He added that:
“The current situation is reminiscent of previous episodes when the SNB resorted to deeply negative rates to protect the economy from external shocks and currency distortions.”
In addition to monetary policy, policymakers are also considering alternative interventions, such as verbal guidance or direct market operations, although these tools are associated with diplomatic risks.
It is worth noting that Switzerland has previously faced criticism from international partners, including the US Treasury, over alleged currency manipulation.
Currently, the SNB must strike a delicate balance: to maintain domestic price stability without provoking capital outflows or weakening confidence in the financial system as a whole. Amid growing global economic uncertainty, further monetary steps by Switzerland could have ripple effects far beyond its borders.
The SNB has already applied negative interest rates between 2014 and 2022 to curb the franc’s excessive appreciation. However, such measures drew criticism, especially from the United States, which accused Switzerland of manipulating the exchange rate. In the current environment, the SNB may prefer rate cuts to currency interventions to avoid diplomatic complications.
