Switzerland's central bank maintained its negative interest rates and expressed willingness to intervene in the currency market as required.
The Swiss National Bank retained its policy rate and interest on sight deposits at the SNB at -0.75 percent on Thursday. The decision came in line with expectations.
The bank said the franc remains highly valued, and the situation on the foreign exchange market is still fragile.
Negative interest as well as the willingness to intervene counteract the attractiveness of Swiss franc investments and ease the upward pressure on the currency.
Based on the assumption that the policy rate will remain at the current level, the bank forecast inflation at 0.4 percent this year, 0.1 percent next year and 0.5 percent for 2021.
The estimate for this was left unchanged, while projection for 2020 was lowered from 0.2 percent and that for 2021 from 0.6 percent.
The economy is forecast to expand around 1 percent in 2019, and between 1.5 percent and 2 percent in 2020. The stronger growth for next year reflects the view that global economic activity will improve.
In September, the bank had forecast 0.8 percent growth for 2019 and 1.7 percent for 2020.
Further, the central bank observed that imbalances persist on the mortgage and real estate markets. The SNB said it will continue to monitor developments on the mortgage and real estate markets closely and regularly reassess the need for an adjustment of the countercyclical capital buffer.
Elsewhere, the government on Thursday slightly raised its growth projection for this year. The State Secretariat for Economic Affairs, or SECO, lifted its growth forecast for 2019 to 0.9 percent from 0.8 percent, while the outlook for 2020 was retained at 1.7 percent.
Growth is forecast to ease to 1.2 percent in 2021. Both the acceleration of GDP growth in 2020 and the slowdown in 2021 will be due to the effect of major sporting events, which has little relevance for the stance of the business cycle.
The expert group of federal government said a gradual economic upturn is not anticipated until 2021.
According to winter forecast, consumer prices will rise 0.4 percent this year before inflation slowing to 0.1 percent in 2020. Inflation is seen at 0.4 percent in 2021.