- Roland Klaeger, an economist at Raiffeisen Schweiz
The Swiss economy has started the week on a wobbly footing, as fundamentals came out worse than expected on Monday. Switzerland's producer prices index declined for the seventh straight month in February, fuelling concerns over deflation risks. According to the Swiss Federal Statistical Office, the producer and import prices dropped 1.4% last month from January, when the index slid 0.6%. Moreover, the 1.4% fall was the biggest since November 2008. Measured on year-over-year basis, Swiss producer and import prices logged a 3.6% decline, the biggest since October 2009, when the gauge plunged 4.7%.
A separate report showed retail sales in the Alpine country dropped unexpectedly in January, clouding optimism over the health of Switzerland's economy. Retail sales dropped at an annualized rate of 0.3% in January, considerably below expectations for a 2.6% gain. Moreover, December's retail sales were revised downwards to a 1.9% increase from a previously reported 2.2%. Retail sales dropped by real 2.1% month-over-month in January, reversing the 1% advance in the prior month, and recording the first decline in four months. Earlier in the month, data showed the Alpine nation's economy grew 0.6% in the final quarter of 2014 from the three months through September, while on annualized basis the economy expanded 1.9%.
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