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SNB decision and SECO forecasts

March 16, 2012

The Swiss National Bank left its benchmark interest rate at 0%, as widely expected, and also maintained the EUR/CHF ceiling at 1.20, matching the forecast by all 14 economists in a Bloomberg poll.

The central bank anticipates consumer prices to fall 0.6% this year (2013: +0.3%, 2014: +0.6%). Separately, the Swiss economy should gradually recover in the next few months, according to the latest report from SECO, the State Secretariat for Economic Affairs in Bern. The GDP growth forecast for 2012 was revised to 0.8%, up from the December forecast of 0.5%. However, the 2013 projection was cut down marginally to 1.8% (prior guidance: 1.9%). The inflation forecast has also been revised down a notch to -0.4% from -0.3% for this year (2013: +0.4%, up from previously +0.3%). The report said that problems surrounding the euro area have alleviated somewhat since the beginning of the year, while recent business surveys in Switzerland are also showing signs of stabilisation.