Switzerland’s December CPI: A Zero-Inflation Signal Amid Mixed Macro Backdrop
The December CPI for Switzerland registered at 0.00% MoM, matching the previous month’s unexpected zero print after a -0.30% dip in November. This halting of deflationary pressure contrasts with the steady 0.20% monthly gains seen earlier in 2025. Core inflation remains subdued, reflecting persistent weak demand and stable energy prices. The Swiss National Bank (SNB) faces a delicate balancing act amid external uncertainties and cautious fiscal policy. Financial markets showed muted reaction, signaling tempered expectations for near-term monetary tightening. Structural trends point to continued low inflation, but geopolitical risks and global supply chain shifts could alter the outlook in 2026.
Table of Contents
The December 2025 Consumer Price Index (CPI) for Switzerland came in at 0.00% month-over-month (MoM), unchanged from November’s revised 0.00% after a sharp -0.30% drop in October. Year-over-year (YoY) inflation remains subdued, hovering near 0.50%, well below the SNB’s 2% target. This marks a significant deceleration from the steady 0.20% monthly gains recorded from August through October 2025, as per the Sigmanomics database.
Drivers this month
- Energy prices stabilized, contributing 0.00 percentage points (pp) to CPI growth, reversing prior declines.
- Shelter costs remained flat, with no upward pressure on inflation.
- Food prices showed marginal increases, offset by lower transportation costs.
Policy pulse
The SNB’s inflation target of 2% remains distant, with core inflation steady near 0.50%. The zero CPI reading suggests limited immediate pressure for rate hikes, reinforcing the SNB’s cautious stance amid global uncertainties.
Market lens
Immediate reaction: The Swiss franc (CHF) showed minimal movement against the euro (EURCHF), while 2-year Swiss government bond yields edged down by 3 basis points, reflecting subdued inflation expectations.
Switzerland’s core macroeconomic indicators paint a mixed picture. GDP growth for Q3 2025 was a modest 0.30% QoQ, consistent with a slow-growth environment. Unemployment remains low at 2.10%, but wage growth is muted at 1.20% YoY, limiting upward pressure on consumer prices. The fiscal deficit narrowed slightly to 0.80% of GDP, reflecting prudent government spending and stable tax revenues.
Monetary policy & financial conditions
The SNB has maintained its policy rate at -0.75% since mid-2024, prioritizing financial stability over aggressive inflation targeting. Liquidity conditions remain ample, with the Swiss franc’s safe-haven status supporting capital inflows despite global volatility.
Fiscal policy & government budget
Switzerland’s fiscal policy remains conservative, with the government emphasizing balanced budgets and targeted infrastructure investments. The 2025 budget projects a slight surplus, supporting long-term fiscal sustainability without stimulating inflation.
Drivers this month
- Energy prices: 0.00 pp contribution, stabilizing after prior declines.
- Shelter: 0.00 pp, reflecting steady housing costs.
- Food: 0.02 pp, slight upward pressure.
- Transportation: -0.02 pp, offsetting food gains.
This chart highlights Switzerland’s CPI trending sideways after a brief deflationary dip in November. The stabilization suggests inflationary pressures remain weak but steady, signaling a pause in the disinflation trend seen earlier in the year.
Policy pulse
The CPI’s flat reading reinforces the SNB’s cautious approach, with inflation well below target and no immediate signs of overheating. This supports expectations for a steady policy rate through early 2026.
Market lens
Immediate reaction: Swiss government bond yields declined slightly, reflecting market confidence in subdued inflation. The CHF remained stable versus EUR and USD, indicating balanced risk sentiment.
Looking ahead, Switzerland’s inflation trajectory faces several potential scenarios. The base case (60% probability) assumes continued low inflation around 0.50% YoY, with stable energy prices and moderate wage growth. The bullish scenario (20%) envisions a gradual pickup to 1.00% YoY, driven by stronger domestic demand and rising global commodity prices. The bearish scenario (20%) projects renewed deflationary pressures below 0%, triggered by external shocks or a sharp franc appreciation.
External shocks & geopolitical risks
Heightened geopolitical tensions in Europe and supply chain disruptions could weigh on Swiss exports and inflation. Conversely, easing tensions and a rebound in global trade may support moderate inflation gains.
Structural & long-run trends
Demographic shifts, technological advances, and persistent productivity gains continue to exert downward pressure on inflation. These factors suggest that Switzerland’s inflation will likely remain below the SNB’s 2% target for the foreseeable future.
Switzerland’s December CPI print of 0.00% MoM signals a pause in recent deflationary trends, but inflation remains subdued overall. The SNB’s cautious monetary stance aligns with this data, as the central bank balances low inflation against global uncertainties. Fiscal prudence and stable financial markets support a steady macro environment, though external risks warrant close monitoring. Investors should watch for shifts in energy prices, wage dynamics, and geopolitical developments that could alter the inflation outlook in 2026.
Key Markets Likely to React to CPI
The Swiss CPI influences several key markets, notably the Swiss franc (CHF), Swiss government bonds, and export-driven equities. The EURCHF currency pair often reacts to inflation surprises, reflecting cross-border trade sensitivity. The SMI index, Switzerland’s benchmark equity market, tracks inflation-driven shifts in corporate earnings and consumer demand. On the fixed income side, SWISS10Y yields respond to inflation expectations and SNB policy signals. Additionally, the BTCUSD pair occasionally reflects risk sentiment shifts tied to macroeconomic data. Lastly, the USDCHF pair is sensitive to relative monetary policy and inflation differentials between the US and Switzerland.
Indicator vs. EURCHF since 2020
Since 2020, Swiss CPI fluctuations have shown a moderate inverse correlation with the EURCHF exchange rate. Periods of rising inflation generally coincide with CHF depreciation against the euro, as higher inflation pressures reduce real returns on Swiss assets. Conversely, deflationary episodes have supported CHF strength. This dynamic underscores the importance of CPI data in shaping currency market expectations and SNB policy outlooks.
| Year | Avg. CPI YoY (%) | EURCHF Avg. Rate |
|---|---|---|
| 2020 | 0.40 | 1.07 |
| 2021 | 0.60 | 1.09 |
| 2022 | 1.00 | 1.05 |
| 2023 | 0.70 | 1.08 |
| 2024 | 0.50 | 1.07 |
| 2025 | 0.50 (est.) | 1.06 |
FAQ
- What does the December 2025 CPI reading indicate for Switzerland?
- The 0.00% MoM CPI reading signals stable prices with no inflationary pressure, reflecting subdued demand and steady energy costs.
- How does Switzerland’s CPI compare historically?
- Compared to the steady 0.20% monthly gains earlier in 2025 and the -0.30% dip in November, December’s zero reading marks a pause in disinflation.
- What are the implications for the Swiss National Bank?
- The SNB is likely to maintain its accommodative stance, as inflation remains well below the 2% target, reducing pressure for rate hikes.
Key takeaway: Switzerland’s CPI stabilization at zero in December signals persistent low inflation, supporting a cautious SNB and steady financial markets amid global uncertainties.
Key Markets Likely to React to CPI
The Swiss CPI release typically influences currency pairs, equity indices, and bond yields sensitive to inflation and monetary policy expectations. The EURCHF pair reacts to inflation surprises due to trade and monetary policy links. The SMI index reflects corporate earnings sensitivity to inflation. Swiss government bond yields, tracked via SWISS10Y, adjust to inflation outlooks. The BTCUSD pair often mirrors risk sentiment shifts tied to macro data. Lastly, USDCHF is sensitive to relative inflation and policy differentials.
Sources
- Sigmanomics database, Switzerland CPI releases, December 2025.
- Swiss National Bank, Monetary Policy Reports, Q4 2025.
- Swiss Federal Statistical Office, Inflation and Economic Indicators, 2025.
- OECD Economic Outlook, December 2025.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.









The December CPI reading of 0.00% MoM contrasts sharply with the -0.30% decline in November and the 0.20% gains seen in August through October 2025. The 12-month average monthly CPI growth now stands at approximately 0.07%, underscoring a persistent low-inflation environment.
Energy and shelter components, which historically drive volatility in Swiss inflation, showed no significant movement this month. Food prices contributed marginally, while transportation costs declined, balancing the overall index.