Zurich (awp) – The Swiss National Bank (SNB) on Thursday raised its inflation forecasts for the current year and the next two. It now expects an increase of 2.8% for 2022, against 2.1% so far. “Without the rate hike decided today, the inflation forecast would be significantly higher,” said the SNB.

The Swiss National Bank still expects GDP growth of around 2.5% for 2022 while unemployment should remain low. “This favorable forecast is based in particular on the assumption that the world economy will continue to progress and that the war in Ukraine will not worsen,” underlines the document.

For 2023, the SNB expects inflation at 1.9% (against 0.9% last March) then at 1.6% (+0.9%) for 2024. This new forecast is based on the assumption of a key rate kept constant at -0.25% throughout the period.

In its baseline scenario for the global economy, the SNB assumes that energy prices will initially remain high, but that there will be no severe shortages in major economic areas. The positive trend in the economy should therefore continue overall.

“Inflation is expected to remain high for some time to come as a result of rising energy and food prices and supply difficulties,” before these factors fade over the medium term. Under the influence of the ever more marked tightening of monetary policy in many regions, inflation should gradually return to more moderate levels, supports the institute.

On Wednesday, the US Central Bank (Fed) raised its key rates by three quarters of a point, the biggest increase since 1994, in order to fight against galloping inflation. The European Central Bank (ECB) has planned to raise rates “in July”.

Switzerland recorded modest growth in gross domestic product (GDP) in the fourth quarter of 2021, which then grew by almost 2% in the first quarter of 2022, recalls the issuing institute. For the current quarter, “the signals remain positive” while the situation continued to improve on the labor market.

“Significant risks weigh on the forecasts” for Switzerland. A disruption in the energy supply in Europe could significantly affect the country’s economy. Rising commodity prices could also dampen growth. In addition, a resurgence of the Covid-19 pandemic cannot be ruled out.

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