Switzerland’s inflation rate held steady at 0.1% in January 2026, matching the previous month’s reading and sitting firmly at the lower edge of the Swiss National Bank‘s comfort zone.
Switzerland’s inflation barely budged at 0.1% in January, hovering right at the bottom of the central bank’s target range.
This tiny increase in prices shows the economy moving forward but just barely, like a turtle making slow and steady progress.
The SNB aims to keep inflation between 0% and 2%, and the current rate sits right at the bottom of that range.
Month-over-month consumer prices actually fell by 0.1% in January, showing that some items got cheaper while others balanced things out.
The last time Switzerland experienced negative inflation was back in May 2025.
Looking ahead, the SNB forecasts annual inflation will average 0.3% for 2026 and 0.6% for 2027.
These predictions assume the central bank will keep its policy rate at 0% throughout the forecast period.
After six consecutive quarterly rate cuts, the SNB held rates steady for the second straight meeting in December 2025.
Investors expect this pause to continue through the March 2026 meeting.
Several factors are keeping inflation low.
Hotel prices dropped, rents decreased, and clothing became more affordable.
The strong Swiss franc also plays a major role by making imports cheaper.
The currency traded around 0.77 per U.S. dollar in January, approaching record levels.
While this makes Swiss vacations abroad more affordable for residents, it creates headaches for Swiss companies trying to sell products overseas.
SNB Chairman Martin Schlegel hasn’t ruled out negative interest rates if needed, though he noted the hurdle for going negative is higher than simply lowering positive rates.
Switzerland previously maintained negative rates for more than seven years until 2022, so the country knows this territory well.
The economic backdrop remains modest, with GDP growth projected at around 1% for 2026 after barely reaching 1.5% in 2025.
Unemployment is expected to tick higher.
The SNB has indicated willingness to tolerate brief periods of negative inflation while focusing on medium-term stability.
The central bank maintains a discount of 0.25 percentage points on sight deposits above a defined threshold while remunerating deposits below the threshold at the policy rate.
Analyst Ankita Amajuri from Pantheon Macroeconomics Europe expects the SNB will stand pat this year, prioritizing medium-term inflation over monthly readings.
This patient approach suggests Swiss monetary policy will remain calm and measured.
Central banks can also influence markets through interest rate decisions that affect borrowing costs and investor behavior.
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