AI Could Push Up Inflation in Short Term, Warns Swiss Central Bank Official

Swiss National Bank governing board member Petra Tschudin has expressed concerns that artificial intelligence (AI) could push up inflation in the short term. Speaking to Finanz und Wirtschaft, she noted that AI can have an effect on prices in both directions.

Tschudin pointed out that investment flows are being redirected, which can lead to adjustments and difficulties for the rest of the economy. This, she said, could result in shortages and price increases, particularly in industries reliant on specific components like chips.

However, Tschudin also acknowledged that AI has the potential to lower prices by increasing productivity and making goods cheaper in the longer term. To achieve this deflationary effect, however, productivity gains would need to be consistent and repeated over time.

The SNB's forecast suggests that inflation will remain within its target range of 0% to 2% up to the first quarter of 2029. Nevertheless, Tschudin emphasized that this should not be taken as a guarantee that interest rates will remain unchanged, and that monetary policy can adjust if new information becomes available.