"The Eurozone crisis is weighing on Switzerland, which is much intertwined with the euro zone economies"
-Sarasin economist Jan Poser
Sales at Swiss retailers fell more than initially was expected in March, raising concerns that the debt crisis in the neighbouring Eurozone weighed on Swiss consumers, the Federal Statistical Office showed Monday. Retail sales, adjusted for working days, declined 0.9% year-on-year in March, after a 2.3% gain in the prior month. In seasonally adjusted terms, retail sales dropped 0.1%. Furthermore, excluding sales of fuel, retail trade turnover tumbled 1% annually in March. Earlier this month, a report showed that Swiss consumer prices extended their longest slump in at least four decades in April. The nation's consumer prices have continued to fall and are now in their 19th consecutive month of annual declines, which is the longest stretch since 1971.
"The Eurozone crisis is weighing on Switzerland, which is much intertwined with the euro zone economies," said Sarasin economist Jan Poser. "I wouldn't attribute the fall in exports too much to the strong Swiss franc, although it remains a headwind."
"The story in my view is that prices for imported goods are still falling, despite the Swiss National Bank's defense of the 1.20 floor," said David Marmet, economist at Zuercher Kantonalbank. "This helps the SNB maintain its monetary policy, and I see no signs of it changing. We believe the SNB will maintain the cap well into 2014."
© Dukascopy Bank SA