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Inflation Difference between Eurozone and Switzerland Narrows to 0.5%

Another five months till Swiss inflation is higher?

When the European economy starts to expand again, who will hike rates first, the SNB or the ECB?

December Update

According to Swiss Statistics the inflation rate remained stable at 0.1% y/y, while the inflation measured by the European HICP standard was +0.3% y/y, slightly higher than in the previous month.  This implies that Swiss HICP inflation is only 0.5% lower than the one in the euro zone (0.8%). Still in February 2012, the difference was 3.7%.

Prices of goods that make up 41% of the basket have fallen by -0.8%, while services (59% of the basket) are up 0.6%. While Swiss goods are rising in price by 0.5% y/y, foreign goods – 25% of total goods – have fallen by 1.2%. The reason for cheaper imported goods can be found in long-lasting contracts that incorporate the new FX rate only slowly and in cheaper prices of oil (-0.4% y/y) and clothes (-3.4% y/y). Read more about the drivers of Swiss inflation.

Still, the upwards trend of inflation, visible in prices of services and Swiss goods seems to have stopped. Services are up only 0.6% y/y and goods of Swiss origin only 0.5%, both values are 0.2% less than one month ago.

Swiss CPI vs Eurozone December 2013 France Switzerland

 

Read also:

Switzerland’s Slow Way to Inflation


George Dorgan
George Dorgan (penname) predicted the end of the EUR/CHF peg at the CFA Society and at many occasions on SeekingAlpha.com and on this blog. Several Swiss and international financial advisors support the site. These firms aim to deliver independent advice from the often misleading mainstream of banks and asset managers. George is FinTech entrepreneur, financial author and alternative economist. He speak seven languages fluently.
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