Swiss Inflation Climbs to Highest Since 2024 as Energy Prices Surge — 2nd Update

By Ed Frankl

Swiss inflation jumped in April as the Iran war sent imported energy costs climbing.

Consumer prices were up 0.6% on year, higher than the 0.3% inflation rate in March, Switzerland's statistics agency said Tuesday. It was the second consecutive rise in inflation, to its highest level since December 2024.

Switzerland is less exposed to the rise in energy prices, given its lower reliance on fossil fuels. However, imported fossil fuels are still expected to keep inflation higher this year.

Prices of petroleum products in Switzerland were up 17% on year, with inflation also driven higher by air transport and international package holidays, the statistics agency said. Imported inflation was 0.9% compared with 0.5% for domestic inflation.

But the headline rate is now above the 0.5% average rate of inflation for this year and 2027 that the Swiss National Bank expected at its last policy meeting in March. The SNB's target is positive but below 2%.

The SNB's chairman, Martin Schlegel, said last month that higher energy prices will lift inflation further in the coming quarters, while growth could be rather subdued in the short term.

"As you can see, the situation remains challenging," he said.

Both domestic and imported inflation are likely to rise over the coming months, with firms set to raise output prices quickly in response to higher input costs, Pantheon Macroeconomics Europe economist Ankita Amajuri said.

"We expect headline inflation to rise gradually to around 1.0% by the end of the year," she said in a note to clients.

The rise in inflation reinforces the argument that the bank needn't bring its policy rate below the current 0%, which had been a concern before the start of the conflict in the Middle East as inflation had circled near zero for much of the last year. Policymakers long said there was a high bar to negative rates given the problems that it causes for savers and bank profits.

Investors now expect one quarter-point rate hike by the SNB this year, according to LSEG.

The Swiss franc has weakened against the euro currency since the SNB issued the unusual statement that it was prepared to intervene in the foreign-exchange market to stop a rapid and excessive appreciation of the franc. The European Central Bank voted to keep rates on hold last week.

The franc's role as a safe-haven currency caused it to rise sharply after the first U.S.-Israeli strikes on Iran in February. A pricier franc makes Switzerland's exports less desirable abroad, hurting Swiss firms while also bringing imported inflation lower.

Write to Ed Frankl at edward.frankl@wsj.com

(END) Dow Jones Newswires

May 05, 2026 04:15 ET (08:15 GMT)