Switzerland’s negative inflation rate helps the economy to stand up to its rivals, according to Swiss National Bank board member Andrea Maechler.

Declining consumer prices are a “necessary part of the adjustment process to allow the Swiss economy to stay competitive,” Maechler said on Tuesday at a conference in Lausanne that was hosted by newspaper Le Temps.

Andrea Maechler
Andrea Maechler
Photographer: Michele Limina/Bloomberg

Prices slumped 1.1 percent in 2015, the most since 1950. The SNB predicts they will fall an average of 0.5 percent this year before rising 0.3 percent in 2017. Maechler, who joined the central bank’s board in July, confirmed that forecast on Tuesday.

The negative inflation rate is one of the fallouts of the SNB’s unexpected move a year ago to abandoned its franc cap. That decision also proved a blow to Swiss exporters. While their situation remains difficult, they may benefit from a pickup in global growth, according to Maechler.

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