Switzerland: Consumer prices unchanged over July last year, halting 21-month decline
August 7, 2013
In July, consumer prices fell 0.4% over the previous month (June: +0.01% month-on-month), a reading that was in line with market expectations. According to the statistical office, the main driver behind the monthly decrease was lower prices for clothing and footwear due to summer sales.
Compared to the same month last year, consumer prices were unchanged in July (June: -0.1% year-on-year), ending the on-going decline begun in September 2011 when the Swiss National Bank established the 1.20 CHF per EUR cap to counter the threat of deflation in the wake of a strongly appreciating Swiss Franc. The inflation rate still sits well below the Bank's 2.0% target. Annual average variation in consumer prices was unchanged from June to July, remaining at 0.4%.
The Central Bank expects consumer prices to drop 0.3% this year, according to its June macroeconomic outlook. For 2014, the Bank expects inflation to rise 0.2%. Panellists polled by FocusEconomics 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