"There is no deflation though there is still a disinflationary tendency in some of the CPI components"
- ZKB economist David Marmet
Consumer prices in Switzerland increased for the first time since October in February, however, remained in negative territory year-on-year, lending support for the Swiss National Bank's case to maintain its cap on the Swiss Franc. Prices were 0.3% higher from a month ago, while on a yearly basis, they dropped 0.3%, both meeting analysts' expectations. Core inflation, which excludes such volatile components like food, beverages or energy, tumbled 0.4% in February, the Federal statistics office said on Friday. In September 2011, the SNB capped the Franc to fend off deflation and recession and, according to the latest data, it is far from removing the cap, due to new risks faced by the Eurozone. Earlier this month a report showed that Swiss gross domestic product grew 0.2% in the fourth quarter of 2012, compared to a 0.6% rise in the previous quarter.
"There is no deflation though there is still a disinflationary tendency in some of the CPI components. It means there is still time before we will see any action from the SNB," said ZKB economist David Marmet.
"It's a positive sign in that other industrial countries went downhill toward year's end," said Alexander Koch, an economist at UniCredit SpA (UCG) in Munich.
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