Switzerland: Annual consumer prices show smallest decline since currency cap established
July 5, 2013
In June, consumer prices rose 0.1% over the previous month, which followed an increase of the same magnitude in May. According to the statistical office, higher prices for alcoholic beverages and tobacco as well as for food and non-alcoholic beverages were the main drivers behind the monthly increase.
Annual consumer prices fell 0.1% in June, which, nonetheless, came in above both the 0.5% decline observed in May and market expectations that had prices falling 0.4%. The annual reading represents the smallest decline since September 2011, when the Swiss National Bank established the 1.20 CHF per EUR cap. However, the inflation rate still sits well below the Bank's 2.0% inflation target. Annual average variation in consumer prices edged up from minus 0.5% in May to minus 0.4% in June.
In its June macroeconomic outlook, the Central Bank expects consumer prices to drop 0.3% this year. For 2014, the Bank expects prices to rise 0.2%. Panellists polled by FocusEconomics expect see inflation at 0.2% in 2013, which is down 0.2 percentage points from last month's forecast. For 2014, panellists expect inflation to rise to 0.6%.
Author: Ricardo Aceves, Senior Economist