Global Inflation Outlook for 2025: Key Predictions and Impacts

Background

Inflation rates have been a major concern for global economies over the past few years, particularly following the COVID-19 pandemic, disruptions to supply chains, and fluctuating energy prices. Central banks worldwide, including the European Central Bank and the US Federal Reserve, have responded with adjustments to interest rates and monetary policy to control surging prices. In Switzerland, historically low inflation rates have been challenged by global instability.

What is happening now

As 2025 approaches, international financial organizations and economic experts are revising their inflation forecasts. Many expect inflation in major economies to moderate compared to the peaks seen in 2022 and 2023, but food, energy, and housing costs remain elevated for many households. The World Bank and OECD both cite geopolitical tension, supply chain re-alignments, and high borrowing costs as ongoing factors. Most forecasts suggest inflation rates will average between 2% and 3% for advanced economies, though emerging markets may face higher volatility.

Impact on Switzerland

Switzerland’s inflation rate is expected to remain relatively stable in 2025, with the Swiss National Bank (SNB) forecasting it to stay around 1.5% to 2%. This is slightly above the traditional Swiss average but well below the double-digit inflation experienced elsewhere. Swiss exporters may feel pressure from a strong franc and changing demand in key markets. For consumers, modestly higher prices and continued caution from the SNB may influence spending and investment decisions in Switzerland.

What happens next

Further central bank decisions, global trade policies, and shifts in energy supplies will shape the inflation landscape into 2025. In Switzerland, the SNB is expected to maintain a cautious approach, potentially adjusting interest rates if inflation deviates from forecasts. Observers recommend households and businesses monitor global developments and stay attuned to policy guidance. While no major inflation shocks are anticipated for Switzerland, the situation remains dynamic, and economic data in the coming months will be closely watched.