Global Inflation Outlook 2025: Key Predictions and Swiss Impact

Background

Inflation, the rate at which the general level of prices for goods and services rises, remains a critical issue for policymakers and citizens worldwide. The COVID-19 pandemic, supply chain disruptions, geopolitical tensions, and energy market volatility have all contributed to unpredictable inflation rates in recent years. As central banks adjust their strategies, global markets closely watch inflation data to gauge possible economic direction.

What is happening now

Leading financial institutions, including the International Monetary Fund (IMF) and central banks such as the European Central Bank (ECB) and the US Federal Reserve, project moderate declines in global inflation for 2025 compared to previous years. However, inflation rates are expected to remain above pre-pandemic levels, particularly in regions facing ongoing energy concerns and supply interruptions. Switzerland, with its traditionally stable price environment, has witnessed modest inflation increases but remains below the European average.

Impact on Switzerland

Switzerland’s robust financial framework and the Swiss National Bank’s proactive policies have limited inflation’s effects on Swiss households. Domestic consumer prices have seen only mild rises, though imported goods and energy costs have exerted upward pressure. The strong Swiss franc has cushioned some global shocks, but exporters face challenges in maintaining competitiveness abroad due to currency appreciation and higher input costs.

What happens next

Economists forecast continued vigilance from the Swiss National Bank, with possible incremental interest rate adjustments to ensure price stability. Consumers may benefit from easing energy prices if international supply chains normalize. Globally, inflation is likely to become less volatile, yet key risks remain, such as geopolitical risks or unexpected market shocks. Swiss businesses and policymakers are expected to monitor developments closely as 2025 progresses.