Switzerland: Economy remains mired in deflation
April 9, 2013
In March, consumer prices rose 0.2% over the previous month, which represents the second consecutive monthly increase after three consecutive drops. The reading fell short of market expectations of a 0.3% increase and mainly reflected higher prices for clothing and footwear as well as for recreation and culture.
Despite the monthly increase, however, annual consumer prices fell 0.6% in March, which came in below both the 0.3% fall registered in February as well as market expectations of a 0.5% decline. As a result, the inflation rate sits well below the Swiss National Bank's 2.0% inflation target. Annual average consumer prices fell 0.6% in March.
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 inflation to rise 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