Swiss National Bank (SNB) governing board member Petra Tschudin suggests that while artificial intelligence might initially contribute to higher inflation due to redirected investment flows and supply chain shortages, its long-term impact on prices is less clear. She questions whether productivity gains from AI will lead to sustained structural deflation, a scenario not typically observed with past productivity enhancements. This perspective aligns with similar warnings from the International Monetary Fund. The SNB's current inflation forecasts, which remain within its target, are conditional on unchanged interest rates and do not imply future policy inaction; monetary adjustments will be made if new relevant inflation data emerges.
SNB's Stance on AI and Inflation
Petra Tschudin of the Swiss National Bank believes AI could temporarily boost inflation, though its overall long-term pricing impact is still uncertain. The central bank is closely monitoring AI's potential to influence prices in multiple directions.
Short-Term Inflationary Pressure from AI
Tschudin notes that redirected investments and scarcity of resources like chips could cause prices to rise, leading to upward inflationary pressure in the short to medium term.
Long-Term Deflationary Potential Questioned
While AI is expected to improve productivity and potentially lower prices over time, Tschudin argues that these productivity gains alone may not result in structural deflation, especially since inflation is measured annually.
International Monetary Fund's Similar Concerns
The International Monetary Fund's chief economist, Silvana Tenreyro, has also published research suggesting that even if AI enhances productivity, it might not necessarily lead to a reduction in inflation.
SNB's Monetary Policy and Forecasts
The SNB's current inflation forecast extends to Q1 2029, remaining within its target range. However, Tschudin clarifies that this is a conditional forecast based on unchanged interest rates, emphasizing that monetary policy will be adjusted if new inflation information becomes available.
