He Swiss National Bank (SNB) took steps to address the growing pressure inflationary when going up Interest rates in 25 basis points, taking them from 1.5% to 1.75%. This increase marks the fifth consecutive approved by the organismwhich seeks to maintain economic stability.
Given the worrying evolution of prices, the SNB revised its projections and estimates that average annual inflation will be 2.2% for the years 2023 and 2024, and 2.1% for 2025. The increase in the monetary policy rate announced this Thursday, June 22 plays a crucial role in controlling inflation in the medium term, according to the organization.
The SNB also warned that it might be necessary additional increases in the monetary policy rate to ensure long-term price stabilityindicating a strong stance and a willingness to take further action if necessary.
As for the economic outlook, the SNB forecasts modest growth for the rest of the year. Explain that the decrease in foreign demandthe loss of purchasing power due to to inflation and tighter financial conditions are having a moderating effect on the economy.
“In general, a growth of the Gross Domestic Product (GDP) is expected close to 1% this year. In this context, it is likely that unemployment rise slightly and production capacity decrease to some extent,” the SNB warned.
inflation in europe
He European Central Bank (ECB) raised interest rates last week and made it clear that there will be more increases in the future to combat inflation that has raised food prices, electric bills and summer vacations. This increase occurs despite the pause that decided to take the Federal Reserve of the US in their own increments.
The ECB placed the rate at 3.5%, which marks the eighth consecutive rise since July 2022 for the 20 countries that use the euro. This unprecedented credit-crunching campaign, seeks to bring inflation back to 2% from the current level of 6.1%.
The President of the ECB, christine lagardemade it clear that there will be more rate increases, even at the next meeting on July 27. The ECB projections acknowledge that controlling inflation will take monthsmaybe more, even though it’s down from last year’s double-digit numbers.
Source: Ambito
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