Swiss National Bank tightens and changes monetary policy

The Swiss National Bank said Friday that it expects inflation to pick up to 1.5 percent next year from around 1 percent in 1999 and that it will tighten its monetary policy somewhat.

The Swiss National Bank said Friday that it expects inflation to pick up to 1.5 percent next year from around 1 percent in 1999 and that it will tighten its monetary policy somewhat.

“The national bank continues to support the economic upswing in Switzerland with its policy,” the central bank said, “without jeopardizing price stability in the long term.” It again defined price stability, as measured by the consumer price index, as an annual rise of less than 2 percent.

Departing from its previous policy, the bank said it would focus future monetary decisions on inflation forecasts rather than money supply aggregates as in the past.

The bank said it expects real Gross Domestic Product to grow around 1.8 percent next year after around 1.5 percent this year. Those forecasts differed slightly from official government forecasts, released Thursday, of a GDP rise of 2 percent next year and 1.3 percent this year.

The Associated Press contributed to this report.