Switzerland: Inflation falls to 32-month low
April 5, 2012
In March, consumer prices added 0.6% over the previous months, which doubled the 0.3% increase recorded in February and overshot market expectations of a 0.4% rise. According to the statistical institute, the monthly jump reflected higher prices for clothing and footwear as well as for oil products. Despite the monthly rise, annual headline consumer prices fell from minus 0.9% in February to minus 1.0% in March, which represents the lowest level since August 2009. At the current level, annual consumer prices sit 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