Inflation rate rises to 0.8 percent

The annual rate of inflation in Switzerland has risen to 0.8 percent, its highest level for three years. An increase in heating oil and petrol prices is mainly to blame.

The annual rate of inflation in Switzerland has risen to 0.8 percent, its highest level for three years. An increase in heating oil and petrol prices is mainly to blame.

Inflation in December rose by more than 0.3 percent to stand at 1.7 percent, according to the Federal Office for Statistics. Apart from the increase in oil prices, a rise in vegetable, fruit and fish prices was also noted.

But officials are upbeat about the inflation rate, saying it falls well within the margin of stability of under 2 percent that Switzerland has enjoyed since 1994, the longest consecutive run of low inflation since World War II. Last year, the country had a zero annual inflation rate for the first time for 39 years.

Officials on Thursday warned that insurance and accommodation costs would rise next year. Newspapers and stamps are also expected to cost more but telephone costs are scheduled to drop further.

Economists from leading Swiss institutions have given an optimistic economic forecast for next year, with the Gross Domestic Product expected to rise. Switzerland is expected to continue its rebound from the recession years of the early 1990s, and whereas inflation is slated to increase slightly, unemployment is expected to continue its downward trend.

From staff and wire reports