Switzerland: Inflation falls for seventh consecutive month
May 7, 2012
In April, consumer prices rose 0.1% over the previous month, which was below the 0.6% increase observed in March and in line with market expectations. According to the statistical institute, the main drivers behind the monthly increase were higher prices for transport as well as for clothing and footwear, which were partially offset by lower prices for alcoholic beverages and tobacco. Despite the monthly increase, annual consumer prices dropped 1.0%, which followed a decline of the same magnitude in March. The reading represents the seventh consecutive fall. At the current level, annual consumer prices remain well below the Swiss National Bank's 2.0% inflation target. Inflation is likely to remain in negative territory, as a strong Swiss franc lowers the cost of imports. The Swiss National Bank predicts inflation to average minus 0.6% this year. For 2013, the Bank sees inflation rising to 0.3%.
Author: Ricardo Aceves, Senior Economist