"There is no deflation though there is still a disinflationary tendency in some of the CPI components"
- ZKB economist David Marmet
The pace of growth of retail sales in Switzerland slowed more than initially was expected in January, indicating weak consumer spending, which accounts for the majority of overall economic activity. According to the Federal Statistical Office, Swiss retail sales increased 1.9% year-on-year in real terms in January, much slower than a 4.7% gain in the previous month. The reading came below analysts' expectations, which called for a 3.7% surge. Retail sales of food, drinks and tobacco registered an increase in real turnover of 1.4%, while the non-food sector expanded by 1.7%. Earlier this month, data showed that consumer prices in the country increased for the first time since October in February, however, remained in negative territory year-on-year. Growth, albeit slow, in retail sales and consumer prices, as well as in nation's gross domestic product, is pointing that Swiss economy is still developing and expanding, even despite Eurozone's sovereign debt crisis.
"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 is doubtful that Switzerland is already on a sustainable recovery path," VP Bank economist Bernd Hartmann said.
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