Swiss Inflation Unexpectedly Holds Before SNB Rate Decision
(Bloomberg) — Switzerland’s inflation rate came in lower in than economists expected last month, a sign the strength of the franc may be offsetting the impact of high energy costs.
Consumer prices rose 0.6% in May from a year earlier, the country’s statistics office said Thursday, matching the result of the previous month. The reading is the fastest since 2024, but weaker than the 0.7% figure forecast in a Bloomberg survey. Core inflation was also unchanged, at just 0.3%.
The report is the final snapshot of consumer prices before the Swiss National Bank’s decision on June 18, and underscores how inflation remains comfortably within the 0-2% range targeted by policymakers. Economists currently don’t expect any interest-rate move before 2028, when they see a hike materializing.
Unlike peers in the neighboring euro zone, where officials are preparing to raise borrowing costs, SNB President Martin Schlegel has been sanguine about the impact of higher energy prices, and on Wednesday reiterated his view that the pickup in consumer prices will be short-lived.
Medium-term pressures remain essentially unchanged, he said in a speech, repeating a standard line from the central bank since the Iran war broke out.
The Swiss franc, which rose some 0.5% against the euro in May, counteracts the effect of energy prices on inflation by making imports cheaper. The currency weakened slightly on Thursday after the inflation numbers were published.
The SNB has been more willing to intervene and prevent gains in the currency ever since war broke out. Because of its haven status among investors, Schlegel said that the Iran war could still lead to more upward pressure on the franc.
Weak domestic demand could still prove a brake on inflation. Switzerland’s economy grew slightly less than initially reported at the beginning of the year, weighed down by stalling consumer spending and a drop in investment. Schlegel predicts a pickup in growth in the medium term.
A plebiscite just days before the upcoming SNB decision may have profound consequences for the economy. On June 14, voters will choose whether to back a proposal to cap the population at 10 million people.
Doing so could curb growth by as much as 12% until the end of the century, a government-commissioned study has found. The executive, along with many business leaders is against the proposal.
Switzerland’s inflation remains much slower than in the euro area that surrounds the country. There, consumer prices surged 3.2% in May. Based on the European Union’s harmonized measure, the Swiss rate was 0.9%.
–With assistance from Kristian Siedenburg, Joel Rinneby and Harumi Ichikura.
(Updates with core inflation, currency market reaction starting in second paragraph.)
©2026 Bloomberg L.P.
