UBS lowers inflation forecast for 2024
Published: Wednesday, Dec 6th 2023, 14:00
Retour au fil d'actualité
The economists at UBS are adjusting their inflation expectations for Switzerland downwards. Following the surprising fall in inflation in November, the bank now also expects the SNB to cut interest rates for the first time in early summer.
The forecast for average annual inflation in 2024 has been lowered to 1.6 percent from 2.0 percent previously, according to an assessment by the big bank's Chief Investment Office on Wednesday. It is unlikely that inflation in Switzerland will rise above 2.0 percent in the coming months, it says. Until recently, UBS could still imagine this.
The bank is encouraged by the fact that inflationary pressure has eased in various components of the consumer price index, such as food, household goods, transportation, restaurants and hotels. In addition, below-average growth is expected in Switzerland in the near future, which should further cushion inflationary pressure, as should the strong franc and falling inflation in the eurozone.
According to UBS, the fact that inflation will not fall even more sharply than forecast is due to the expected price increases for public transport and the increase in the reference interest rate for rents, which will make housing even more expensive in the future. Energy prices are also likely to rise further in January.
Due to the declining inflation risks, the Swiss National Bank (SNB) is unlikely to raise interest rates again at next week's meeting, but will leave them unchanged, according to UBS estimates. UBS now expects a first rate cut in June, followed by two further cuts in September and December 2024. Previously, the bank had not expected a first cut until next September.
©Keystone/SDA
French 
English 
German 
Spanish 
Arabic