Switzerland: Consumer prices extend their longest fall in four decades
June 6, 2013
In May, consumer prices rose 0.1% over the previous month, which was above the flat figure reported in April and was in line with market expectations. According to the statistical office, the monthly increase mainly reflects higher prices for clothing and footwear as well as for food and alcoholic beverages.
Despite the monthly increase, annual consumer prices fell 0.5% in May, which followed 0.6% decline in April, marking the 20th consecutive month of deflation and the longest stretch of falling prices in nearly four decades. The inflation rate sits well below the Swiss National Bank's 2.0% inflation target. Annual average variation in consumer prices remained unchanged at April's minus 0.5%.
The Swiss National Bank expects consumer prices to drop 0.2% this year. For 2014, the Bank expects prices to rise 0.2%. Panellists polled by FocusEconomics expect see inflation at 0.1% in 2013, which is down 0.1 percentage points from last month's forecast. For 2014, panellists expect inflation to rise to 0.8%.
Author: Ricardo Aceves, Senior Economist