Swiss consumer prices fall in September
Data released Tuesday shows Swiss consumer prices fell by 0.9 percent in September, continuing a deflationary trend.Geneva -- Swiss consumer prices fell by 0.9 percent on a 12-month basis in September, official data showed on Tuesday, continuing a trend feared by Switzerland's central bank.
Compared to August, consumer prices remained stable after a year-on year fall of 0.8 percent recorded in August and a 50-year low of minus 1.2 percent in July, the Federal Statistics Office said in a statement.
While energy, housing, transport, hotel and restaurant prices fell in September, household goods, food and communications prices rose.
Much of the downward trend was caused by a 5.5 percent decline in the price of imported goods, compared to 0.9 percent increase in the price of domestic goods, according to the statistics office.
With interest rates at a historic low point since March, the Swiss National Bank expects inflation to reach an average of minus 0.5 percent in 2009 due to the economic crisis, reaching positive territory with an average of 0.6 percent in 2010.
The bank highlighted the risk of deflation or a long period of falling prices, which may cause reduced demand, falling production, a rise of unemployment and further decline in prices.
Thomas Jordan, a member of the SNB's governing board, warned that the global economic recovery would have a delayed impact on the domestic Swiss economy, and that the drop in Swiss output could last for "some time."
However, the SNB in September revised its forecast for the Swiss economy, which is now expected to shrink by between 1.5 and 2.0 percent in 2009 rather than the 2.5 to 3.0 percent forecast in the summer.
AFP / Expatica