- The economics department
Last month a report from the Federal Statistics Office raised concerns about the stability of the Alpine economy, as inflation turned into negative territory. Moreover, disappointing Q4 growth raised speculations about another intervention from the SNB. Both quarterly and annual growth disappointed markets, while exports– one of the GDP key components, plunged 1.7% over the period. Another worrying sign, is a drop in the UBS consumption index. All these figures raised questions about the reliability of the official growth outlook, which currently stands for 2.3% for 2014, while the government also expects a 2.7% growth in 2015.
Last week's data, however, eases some of the pressure on the Swiss National Bank, as inflation accelerated to 0.1% last month, less than expected, though recovering from a 0.3% decline a month earlier. On a yearly basis, however, CPI still remained in a contraction zone, falling 0.1% from a 0.1% rise in the prior month. Swiss inflation data, however, tends to have a muted market impact as the economy is outside the 18-nation bloc and has largely withstood the global financial crisis.
A separate report showed unemployment rate remained unchanged at 3.2% on a seasonally adjusted basis in February. An implementation of the minimum wage that will be the largest in the whole world, will have a negative impact on the labour market.
© Dukascopy Bank SA