"Even though the distorting effects from the rise in the Swiss franc are fading out, we're still waiting for positive inflation rates"
- VP Bank economist Bernd Hartmann
Producer and import prices in Switzerland advanced less than initially was expected in December, due to higher domestic costs. According to the Federal Statistics Office, producer and import price inflation added 0.1% last month, after a flat reading in the previous month. On a yearly basis, producer and import price inflation slowed to 1%, from 1.2% in November. Overall producer prices and import prices expanded by 1.3% and 0.1%, respectively. On Wednesday, the report showed that retail sales expanded by 2.9% in November, after a 2.7% drop in October, but slower than the 3.4% rise forecast by economists. Data are showing that Swiss economy is still growing, however, at a slower pace, as consumers and businesses are reluctant to increase their spending.
"Even though the distorting effects from the rise in the Swiss franc are fading out, we're still waiting for positive inflation rates. We are, however, expecting inflation rates to turn positive in coming months," VP Bank economist Bernd Hartmann said. "Giving up the exchange rate floor is not on the agenda (of the SNB) so there is no inflation pressure from the exchange rates."
"It is doubtful that Switzerland is already on a sustainable recovery path. The economic problems in the eurozone are having an increasingly strong impact on the Swiss economy," he added.
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