Swiss National Bank Warns AI May Increase Short-Term Inflation

Governing board member Petra Tschudin stated that artificial intelligence could increase inflation in the short to medium term. In an interview with Finanz und Wirtschaft, Tschudin explained that redirected investment flows and shortages of components such as chips could create upward inflationary pressure.

While acknowledging that AI might lower prices in the long term by increasing productivity, Tschudin questioned whether such gains would lead to structural deflation. This view aligns with research from Silvana Tenreyro, the chief economist of the International Monetary Fund, who suggested that productivity boosts from AI may not necessarily lower inflation.

The Swiss National Bank currently forecasts that inflation will remain within its 0 to 2 per cent target range through the first quarter of 2029. However, Tschudin clarified that the bank will adjust monetary policy if new relevant information about inflation emerges.