"The inflation path is being shifted down, but overall the picture stays the same"
- Alexander Koch, an economist at UniCredit
Producer and imports prices in Switzerland improved in February, however, less than initially predicted, reflecting manufacturers' concerns about future economic performance of the country. According to the Federal Statistics, the prices of domestically produced and imported goods increased 0.1% last month, up from a drop of 0.1% in January, but below the expected 0.3% gain. On a yearly basis, prices were 0.1% down, compared to a 0.8% drop a month earlier. At the same time, a gauge of producer prices, which shows the price development of domestically produced products, jumped by 0.4%, while a measure of imported prices dropped 0.7%. The latest data are adding to concerns that despite modest growth, manufacturers are showing unwillingness to increase their spending.
"The inflation path is being shifted down, but overall the picture stays the same," said Alexander Koch, an economist at UniCredit. "Since the cap was set in 2011, their stance has been relatively unchanged. They've made clear that the ceiling is not for fine-tuning, and I expect the SNB's stance to continue."
"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.
© Dukascopy Bank SA