Swiss National Bank Chairman Jean-Pierre Roth told a Swiss newspaper on Sunday further interest rate rises were in the pipeline to fight inflation due to a weak Swiss franc.
"The weak franc influences the prices of imported goods. We are therefore importing inflation and we have to watch that closely," Roth told SonntagsBlick in an interview.
"If we were to leave interest rates where they are in this period of good business cycle development, we would have to expect inflation in the long term. We thus have interest rate rises in the pipeline," he said.
Most analysts expect a fifth consecutive SNB rate increase by 25 basis points to 2.00 percent when it meets again on December 14 and some see another rise in March.
Roth repeated that he saw Swiss economic growth normalising at a rate of 2 percent in 2007.
The SNB, many economists, and the Swiss government expect growth to slow to around 2 percent next year from about 3 percent in 2006, the strongest rate in six years.
"We expect for 2007 a normalisation of growth ... I am talking about a growth of 2 percent. That is very positive as under normal conditions we previously reckoned with growth of 1.5 percent," Roth said.
Switzerland was very competitive and had everything it needed for strong growth, but the world economy was normalising, Roth said. "We cannot develop independently of our neighbours," he said.
Roth said he was not worried about a collapse of the economy.
"There is no objective argument for an imminent recession," he said.
"Some people may be reminded of the year 2000, when there was a bad awakening after the market boom. But at that point in time we had a completely different situation. We had a market bubble. Today, the economic factors are in line with the development."
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