Moderate Economic Growth Amid Stable Inflation

In an environment of moderate growth rates, persistently zero interest rates, and inflation within the target range, Swiss real assets are proving to be significantly superior to government bonds. Real estate benefits directly from persistently low financing costs and chronic scarcity, while the Swiss stock markets are performing well thanks to defensive heavyweights with strong pricing power and stable dividends ranging from 3.00% to 4.00%. In direct comparison, Swiss government bonds—with yields below the inflation threshold of 0.60%—offer a negative real return and are losing their appeal. For the portfolio, this means a clear overweight in value and dividend stocks. Unlike nominal securities, these offer genuine capital protection and attractive yield premiums.

The geopolitical oil price shock caused by the Middle East conflict is slowing down the Swiss economy. Due to rising energy costs and high levels of uncertainty, the KOF is revising its real GDP forecast downward to 0.80% for 2026 (from 1.00%) and to 1.50% for 2027. As a result, the economy is growing below its potential for the time being. At the same time, the inflation forecast for 2026 has been raised to 0.60% due to fuel and energy prices, but remains within the stability range.

In line with this development, the Swiss National Bank left its key interest rate unchanged at 0.00% in its latest economic assessment. The Governing Board concludes that inflation of 0.60% is expected in the medium term and that second-round effects will remain moderate, and sees no need for action. However, to counteract Swiss franc appreciation that hinders exports, the National Bank remains prepared to intervene in the foreign exchange market.

The labor market continues to show signs of stagnation. Due to a lack of economic momentum, the SECO unemployment rate remains unchanged at 3.10%. While the federal government is implementing restrictive austerity programs to comply with the debt brake, cantons such as Zurich and Bern are taking countermeasures. They are using their financial leeway to implement significant tax cuts, which has a supportive effect on purchasing power.

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KOF Economic Forecasts

GDP 2026: 0.80%
‍Inflation 2026: 0.60%
Key interest rates: 0.00%

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Dino Marcesini, Partner

_{Sources: Chefinvest, ZKB, SECO
As of: June 24, 2026}