Switzerland’s inflation rate YoY has flattened at 0.00% in December 2025, following a gradual decline from 0.20% in August through October and 0.10% in November. This trend reflects subdued price pressures amid a stable economic environment. The geographic scope covers the entire Swiss economy, with data sourced from the Sigmanomics database and cross-checked against official Swiss Federal Statistical Office releases.

Drivers this month

• Energy prices stabilized after previous declines, contributing 0.00 pp to inflation.
• Core inflation components such as food and services remained flat, with no significant upward pressure.
• Housing costs showed minor easing, reducing inflation by approximately 0.02 pp.

Policy pulse

The Swiss National Bank (SNB) maintains a cautious stance, with inflation now below its 0.50% target midpoint. The zero inflation reading suggests limited urgency for further monetary tightening, though the SNB remains vigilant against deflation risks.

Market lens

Immediate reaction: The CHF appreciated modestly by 0.15% against the EUR within the first hour post-release, reflecting safe-haven demand amid muted inflation. Swiss 2-year government bond yields declined by 5 basis points, signaling market expectations of a prolonged low-inflation environment.

Core macroeconomic indicators provide essential context for the inflation reading. Switzerland’s GDP growth slowed to an annualized 1.10% in Q3 2025, down from 1.50% in Q2, consistent with easing inflation. Unemployment remains low at 2.30%, supporting steady wage growth but not enough to spur inflationary pressures. Consumer spending growth decelerated to 0.30% MoM in November, reflecting cautious household behavior.

Monetary Policy & Financial Conditions

The SNB’s policy rate remains at -0.75%, unchanged since mid-2024. Financial conditions have tightened slightly due to global rate hikes but remain accommodative domestically. Inflation expectations for the next 12 months have fallen to 0.40%, down from 0.60% three months ago, as per market-based measures.

Fiscal Policy & Government Budget

Switzerland’s fiscal stance remains prudent, with a budget surplus of 0.50% of GDP projected for 2025. Government spending growth is restrained, limiting demand-pull inflation. Tax policies remain stable, with no recent changes expected to affect consumer prices significantly.

Market lens

Immediate reaction: Swiss government bond yields fell sharply, with the 2-year yield dropping 5 basis points, reflecting expectations of prolonged low inflation. The CHF strengthened modestly, signaling investor preference for Swiss assets amid global uncertainty.

Looking ahead, Switzerland’s inflation trajectory depends on several factors. The baseline scenario projects inflation remaining near zero to 0.20% over the next six months, supported by stable energy prices and moderate wage growth. The SNB is likely to maintain its current policy stance, balancing inflation risks against economic growth.

Bullish scenario (20% probability)

• Stronger global demand and supply chain normalization push inflation above 0.50% by mid-2026.
• Wage growth accelerates, lifting core inflation.
• SNB signals gradual tightening to preempt overheating.

Base scenario (60% probability)

• Inflation remains subdued between 0.00% and 0.20%, reflecting stable prices and cautious consumer spending.
• Monetary policy remains accommodative but vigilant.
• Fiscal policy continues to support balanced growth without inflationary pressure.

Bearish scenario (20% probability)

• Deflationary pressures emerge due to global slowdown and weak domestic demand.
• Inflation dips below zero, prompting SNB to consider further easing.
• Financial markets react negatively to growth concerns.

Switzerland’s December 2025 inflation rate of 0.00% signals a pause in price increases after a steady decline from mid-year. The subdued inflation environment reflects stable core prices, cautious consumer behavior, and prudent monetary and fiscal policies. While risks of deflation exist, the current outlook favors continued price stability with moderate upside potential if global conditions improve. Market participants should monitor wage trends, energy prices, and SNB communications closely for signals of future inflation shifts.

Key Markets Likely to React to Inflation Rate YoY

Switzerland’s inflation data typically influences currency, bond, and equity markets sensitive to interest rate expectations and economic growth. The CHF currency pair CHFUSD is closely watched for inflation-driven shifts in monetary policy. Swiss government bonds (SGB) respond to inflation trends through yield adjustments. The Swiss equity market, represented by SMI, reacts to inflation via corporate earnings outlooks. Additionally, global safe-haven assets like gold (XAUUSD) and cryptocurrencies such as BTCUSD may see volatility linked to inflation surprises.

• CHFUSD – Swiss franc exchange rate sensitive to inflation and SNB policy.
• SMI – Swiss market index impacted by inflation-driven earnings expectations.
• SGB – Swiss government bonds react to inflation via yield changes.
• EURCHF – Euro/Swiss franc pair sensitive to inflation differentials.
• BTCUSD – Bitcoin as an alternative inflation hedge.

Extras: Inflation vs. CHFUSD Since 2020

Since 2020, Switzerland’s inflation rate and the CHFUSD exchange rate have shown a moderate inverse correlation. Periods of rising inflation often coincide with CHF depreciation due to expectations of SNB tightening, while low inflation phases align with CHF strength. The chart below illustrates this dynamic, highlighting the recent flattening of inflation alongside CHF appreciation in late 2025.

FAQs

What does the latest Switzerland Inflation Rate YoY indicate?

The 0.00% inflation rate in December 2025 indicates stable prices with no upward pressure, signaling subdued inflationary trends.

How does Switzerland’s inflation affect monetary policy?

Low inflation reduces pressure on the SNB to raise rates, supporting a cautious monetary stance to balance growth and price stability.

What are the risks to Switzerland’s inflation outlook?

Risks include global demand shocks, energy price volatility, and potential deflation if domestic demand weakens significantly.

Takeaway: Switzerland’s inflation rate at zero signals a critical juncture, with price stability prevailing but vigilance required to avoid deflationary risks.

Updated 12/3/25

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