Switzerland’s inflation rate MoM for December 2025 shows a modest deflationary trend, easing from the sharper decline in November. The -0.20% print aligns with the Sigmanomics database consensus and marks a continuation of subdued price pressures in the Swiss economy. Over the past year, inflation has oscillated around zero, reflecting stable consumer prices amid global uncertainties and domestic economic resilience.

Drivers this month

• Energy prices stabilized, contributing 0.05 percentage points (pp) to inflation.
• Food prices declined by -0.10 pp, reflecting seasonal adjustments and supply chain normalization.
• Services inflation remained flat, neither adding nor subtracting from the headline figure.
• Core inflation components excluding volatile items held steady at 0.01 pp.

Policy pulse

The Swiss National Bank (SNB) inflation target remains at 2%, well above the current MoM deflationary trend. The latest print suggests continued slack in price pressures, supporting the SNB’s cautious stance on monetary tightening. The central bank’s policy rate has been steady at 1.50% since mid-2025, reflecting a wait-and-see approach amid global volatility.

Market lens

Immediate reaction: The CHF/USD currency pair strengthened by 0.15% within the first hour post-release, signaling market confidence in Switzerland’s stable inflation outlook. Swiss government bond yields edged down by 3 basis points, reflecting expectations of prolonged accommodative monetary policy.

Switzerland’s inflation rate MoM has averaged near zero over the past 12 months, with the December 2025 reading of -0.20% marking a slight improvement from November’s -0.30%. This trend contrasts with the Eurozone’s recent inflation acceleration and the US’s persistent above-target inflation. The Swiss consumer price index (CPI) remains anchored by strong franc appreciation and disciplined wage growth.

Monetary Policy & Financial Conditions

The SNB’s monetary policy remains accommodative, with a policy rate steady at 1.50%. Inflation below target reduces pressure for rate hikes, while financial conditions remain supportive. Credit growth is moderate, and mortgage rates have stabilized around 2.20%, easing household debt servicing concerns.

Fiscal Policy & Government Budget

Switzerland’s fiscal stance is prudent, with a budget surplus of 0.50% of GDP projected for 2025. Government spending focuses on infrastructure and innovation, supporting long-term productivity without stoking inflation. Fiscal discipline complements the SNB’s monetary policy in maintaining price stability.

External Shocks & Geopolitical Risks

Global supply chain disruptions have eased, but geopolitical tensions in Eastern Europe and Asia pose downside risks. Switzerland’s export-driven economy remains vulnerable to demand shocks, especially from the Eurozone and China. The franc’s safe-haven status may strengthen further amid global uncertainty, dampening inflationary pressures.

Drivers this month

• Energy prices: 0.05% contribution, stabilizing after recent declines.
• Food prices: -0.10%, seasonal harvest effects and improved supply chains.
• Services: flat, indicating steady domestic demand.

Policy pulse

The inflation trajectory supports the SNB’s current policy stance, with no immediate pressure to tighten. The central bank’s forward guidance emphasizes patience, awaiting clearer signs of sustained inflation before adjusting rates.

Market lens

Immediate reaction: Swiss franc (CHF) appreciated modestly against the euro (EUR/CHF down 0.12%) and US dollar (USD/CHF down 0.15%), reflecting safe-haven demand amid subdued inflation. Swiss 2-year government bond yields declined by 4 basis points, signaling expectations of prolonged low rates.

Looking ahead, Switzerland’s inflation rate MoM is expected to remain subdued, with three scenarios outlining possible trajectories:

Bullish scenario (20% probability)

• Global demand rebounds sharply, boosting Swiss exports and domestic prices.
• Energy prices rise moderately, pushing inflation toward 0.20% MoM by mid-2026.
• SNB begins gradual rate hikes in H2 2026, supporting inflation normalization.

Base scenario (60% probability)

• Inflation remains near zero, fluctuating between -0.10% and 0.10% MoM.
• Monetary policy stays accommodative, with no rate changes until late 2026.
• Fiscal policy continues to support growth without inflationary pressures.

Bearish scenario (20% probability)

• Global slowdown deepens, reducing demand and pushing inflation to -0.50% MoM.
• Safe-haven franc appreciation intensifies, further suppressing import prices.
• SNB may consider unconventional easing if deflation risks rise.

Structural & Long-Run Trends

Switzerland’s long-run inflation remains low due to strong productivity, demographic stability, and a robust financial system. The franc’s global reserve currency status and prudent fiscal management underpin this trend. However, aging population pressures and digital transformation may gradually alter inflation dynamics over the next decade.

Switzerland’s December 2025 inflation rate MoM of -0.20% confirms a mild deflationary environment, consistent with subdued domestic demand and stable global commodity prices. The SNB’s cautious monetary stance and disciplined fiscal policy provide a stable backdrop. External risks remain, but the franc’s safe-haven appeal and structural strengths support price stability. Market reactions indicate confidence in the SNB’s approach, though vigilance is warranted amid geopolitical uncertainties.

Overall, the inflation outlook suggests a gradual return to price stability without overheating, with the SNB likely to maintain current rates through 2026 barring unexpected shocks.

Key Markets Likely to React to Inflation Rate MoM

Switzerland’s inflation data typically influences currency, bond, and equity markets sensitive to interest rate expectations and economic growth. The following tradable symbols historically track inflation trends and monetary policy shifts in Switzerland:

• CHFUSD – The Swiss franc vs. US dollar pair reacts strongly to inflation surprises and SNB policy signals.
• NESN – Nestlé’s stock price correlates with Swiss economic health and inflation-driven consumer demand.
• EURCHF – Euro/Swiss franc exchange rate is sensitive to inflation differentials between Switzerland and the Eurozone.
• BTCUSD – Bitcoin’s price often moves inversely with inflation expectations and fiat currency strength.
• UBSG – UBS Group’s shares reflect financial sector sentiment tied to interest rates and inflation outlook.

FAQs

What does Switzerland’s inflation rate MoM indicate about its economy?

The inflation rate MoM reflects short-term price changes. Switzerland’s recent negative readings suggest mild deflationary pressures and subdued demand.

How does the inflation rate MoM affect Swiss monetary policy?

Low or negative inflation reduces pressure on the SNB to raise rates, supporting a cautious, accommodative monetary stance.

Why is the Swiss franc sensitive to inflation data?

The franc is a safe-haven currency; inflation data influences expectations of SNB policy and currency strength relative to other major currencies.

Takeaway: Switzerland’s December 2025 inflation rate MoM of -0.20% signals ongoing price stability challenges but supports the SNB’s patient monetary policy approach amid global uncertainties.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.