Swiss inflation rebounds in June

Inflation rebounds in Switzerland in June Keystone-SDA

Consumer prices picked up again in June in Switzerland, after briefly dipping into negative territory the previous month.

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In June, inflation rose by 0.1% year-on-year and by 0.2% compared with the previous month, announced the Federal Statistical Office (FSO) in a press release on Thursday.

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These figures are at the upper end of the forecast range. Economists surveyed by AWP were forecasting inflation of between -0.1% and +0.1% year-on-year, and between 0.0% and +0.2% month-on-month.

While prices of local products rose by 0.7% compared with June 2024, those of imported products fell by 1.9%. This decline is explained by the fall in oil prices and the appreciation of the franc, particularly against the dollar, which makes imported goods less expensive.

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Among product categories, the biggest falls were seen in car hire (-19% year-on-year), air transport (-11.2%) and petrol (-9.7%).

On the other hand, rents, the main item of expenditure for the Swiss, rose by 2.6% year-on-year. Some foodstuffs also saw their prices soar, notably fruit and vegetables (+10.7%), onions and leeks (+11.9%) and stone fruit (+6.7%).

Inflation is once again in the zone that the Swiss National Bank (SNB) considers as price stability, i.e. a consumer price index (CPI) of between 0% and 2%. To defend this objective, in mid-June it lowered its key rate by 25 basis points to 0%, thereby encouraging companies and individuals to consume rather than save.

Rents weigh

In May, inflation slipped into negative territory, settling at -0.1% year-on-year for the first time since March 2021.

Most economists are forecasting inflation of between 0.1% and 0.3% this year, and between 0.2% and 0.9% in 2026.

“Excluding rents, Swiss inflation will be negative at -0.5% year-on-year, reflecting a situation of deflation in almost all other goods and services,” noted Arthur Jurus, investment director at Oddo BHF Switzerland.

“Rising rents are preventing the CPI from plunging, making housing costs the main source of inflation in Switzerland and raising fears that inflationary pressures will persist until the housing crisis is resolved,” he added.

Translated from French by DeepL/mga

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