Switzerland: October data show continued year-on-year fall in consumer prices
November 5, 2013
Consumer prices fell 0.1% over the previous month in October. The reading contrasts both the 0.3% increase observed in September and the 0.1% rise the market had expected. The monthly decrease mainly reflects lower prices for food and non-alcoholic beverages. Prices for fuel and fresh food also registered lower variations.
Consumer prices fell 0.3% in October over the same month last year, decreasing for the second time in four months (September: -0.1% year-on-year). Thus, consumer prices resumed the declining annual trend that began in September 2011 when the Swiss National Bank established the 1.20 CHF per EUR cap to counter the appreciation of the Swiss franc. The inflation rate remains well under the Bank's 2.0% target. Annual average variation in consumer prices has remained stable at the same minus 0.3% rate since August.
The Central Bank expects consumer prices to drop 0.2% this year, according to its September macroeconomic outlook. For 2014, the Bank expects inflation to rise 0.3%. Panelists polled by FocusEconomics see inflation at 0.2% in 2013, which is down 0.2 percentage points from last month's forecast. For 2014, panelists expect inflation to rise to 0.6%.
Author: Ricardo Aceves, Senior Economist