Swiss Inflation Falls in September

Swiss consumer prices fell by 0.9 percent on the year in September as cheaper oil and fuel lowered the cost of living.

This was the seventh year-on-year decline in a row. Consumer prices were unchanged from August.

The Swiss National Bank has taken drastic actions to fight the risk of deflation. It has cut interest rates to record lows, intervened to stem a rise in the Swiss franc against the euro and bought corporate bonds to lower credit spreads.

Prices for domestically produced goods rose by 0.9 percent year by year while prices for imported products fell by 5.5 percent, the statistics office said. Core inflation (excluding volatile components such as energy or food) also ticked lower to 0.6 percent in September.

Prices for heating oil fell over 40 percent compared to September 2008 and fuel costs were nearly 16 percent lower. Food was also cheaper than a year ago, while clothes and shoes still cost 2.4 percent more than last year.

The weak inflation data will keep the Swiss National Bank committed to its anti-deflation fight, economists said, though the recent surprisingly strong rebound in Swiss economic indicators have dampened risks of a harmful deflationary spiral.

Swiss Inflation Falls in September, Reuters
10/6/2009 9:44:48 AM