Finance
Swiss National Bank Chairman Says Middle East Conflict Will Hit Economy
Published by Global Banking & Finance Review®
Posted on April 24, 2026
2 min readLast updated: April 24, 2026
Add as preferred source on GoogleQuick Summary
SNB Chairman Martin Schlegel warns that the Middle East conflict, through elevated energy prices and economic uncertainty, could slow Swiss growth and push inflation higher, though the bank retains full capacity to maintain price stability via interest rate and FX interventions.
Swiss National Bank Chairman: Middle East Conflict to Impact Economy, Inflation
Impact of Middle East Conflict on Swiss Economy and SNB Policy
By John Revill
Economic Uncertainty and Inflation Outlook
BERN, April 24 (Reuters) - The Middle East conflict will lead to slower economic growth and higher inflation in Switzerland, but the Swiss National Bank has unrestricted scope to target price stability, SNB Chairman Martin Schlegel said on Friday.
The war had made the global economic situation "very uncertain", Schlegel told the SNB's annual general meeting.
The outlook for inflation and the economy in Switzerland had also become much more unclear, he added.
Short-term and Medium-term Growth Projections
"Growth could be rather subdued in the short term, even though we expect an upturn to some extent in the medium term. In the coming quarters, higher energy prices will lift inflation further in Switzerland," Schlegel said in Bern.
Swiss Inflation and Currency Dynamics
Swiss inflation has recently tended towards the bottom end of the SNB's 0-2% target range, which it calls price stability.
Meanwhile upward pressure on the Swiss franc has increased, with investors seeking safe havens, which threatened to push inflation lower by making imports cheaper, Schlegel said.
SNB Policy Response and Foreign Exchange Interventions
The SNB has kept its interest rate locked at 0%, the lowest among major central banks, and last month said it had increased its readiness to intervene in foreign currency markets to cap a too rapid or excessive rise in the franc.
Economists at UBS estimate the SNB increased its foreign policy purchases to 2.5 billion francs in March, a big increase from recent months, but still modest compared with interventions during the Covid pandemic in 2020.
Commitment to Price Stability
The SNB would not hesitate to act to keep inflation on target, Schlegel said, and adjust monetary policy if necessary.
"We have unrestricted room for manoeuvre with regard to the SNB policy rate and foreign exchange market interventions," he said, reiterating that the SNB was more willing to buy foreign currencies to weaken the franc.
(Reporting by John Revill, editing by Dave Graham)
Key Takeaways
- •Middle East conflict could slow Swiss economic growth and raise inflation, especially via persistent energy price shocks.
- •SNB retains unrestricted room to maneuver on policy rates and foreign exchange market interventions to maintain its 0–2% inflation target.
- •Swiss inflation remains near the bottom of the SNB’s target—0.1% in early 2026—and interventions aim to offset safe‑haven‑driven franc appreciation that would otherwise damp imported inflation.
Frequently Asked Questions about Swiss National Bank chairman says Middle East conflict will hit economy
1How will the Middle East conflict affect Switzerland's economy?
The conflict is expected to lead to slower economic growth and higher inflation in Switzerland, making the economic outlook more uncertain.
2What is the Swiss National Bank's inflation target?
The Swiss National Bank targets an inflation range of 0-2%, which it considers price stability.
3How is the Swiss franc being impacted by current events?
The Swiss franc is facing upward pressure as investors seek safe havens, which could lower inflation by making imports cheaper.
4What actions is the SNB ready to take to maintain price stability?
The SNB has unrestricted scope to adjust the policy rate and intervene in foreign exchange markets to maintain inflation within its target range.
5Has the SNB intervened in the currency markets recently?
Economists estimate the SNB increased its foreign currency purchases in March to 2.5 billion francs, up from recent months.
