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Consumer index shows deflation is still a risk

Consumer prices in Switzerland rose for the first time in ten months in December, according to the Federal Statistics Office.

Figures published on Thursday show that the consumer price index rose 0.3 per cent compared with a year ago but was 0.2 per cent lower than for November.

Average inflation for 2009 was -0.5 per cent, dipping into negative territory for the first time in 50 years.

“It shows that inflationary pressures are very limited, to say the least,” commented analyst Jan Poser at Bank Sarasin. “Actually there are still deflationary risks.”

“We need to see a sustained recovery. Whether we will get this is the big question for 2010,” he added.

The Swiss National Bank has cautioned that economic recovery in Switzerland remains weak.

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