Higher oil costs trigger price rises

The latest data on prices show that the combined index for Swiss producer and import prices rose 0.6 per cent in December over the previous month, and was up 1.5 per cent over December 1998, the federal statistics office said.

The latest data on prices show that the combined index for Swiss producer and import prices rose 0.6 per cent in December over the previous month, and was up 1.5 per cent over December 1998, the federal statistics office said.

Looking more closely at the figures, import prices rose 1.4 per cent over prices in December 1998, while producer prices were up 0.3 per cent.

The statistics office said higher oil prices were largely behind the increase in the producer/import prices. Other factors were higher metals prices and a weaker Swiss franc.

“I have to admit that the monthly increase was higher than expected,” said Marcus Allenspach, economist at Cantrade Private Bank in Zurich.

“In particular we have seen much higher import prices than we assumed,” he said, “Having said that there is no period of accelerated inflation expected in Switzerland.”

“We have seen higher energy prices in the month of December,” Allenspach added. “But the oil price has stabilised again in January so there is no need to worry.”

However, the picture is quite different for 1999 as a whole. The statistics office said that for the whole of last year, producer/import prices dropped. They fell by an average of 1.4 per cent in compared with the average for 1998. It said the difference was due to the fact that prices rose considerably in the first quarter of 1998, before coming down again.

By Tom O’Brien