Swiss Consumer Prices Resumed Declines in September

Swiss consumer prices fell in September after stabilizing in the previous two months, resuming a path of annual declines that started in 2011.

Prices decreased 0.1 percent from a year earlier, the Federal Statistics Office in Neuchatel said in an e-mailed statement today. That’s in line with the median forecast in a Bloomberg News survey of 15 economists. Compared with a month earlier, prices increased 0.3 percent.

The Swiss National Bank imposed a franc ceiling of 1.20 versus the euro two years ago, citing the risks of deflation and a recession. While the measure has helped Switzerland dodge the six-quarter slump that afflicted the neighboring euro area, consumer prices declined for 21 months after the cap’s introduction, the longest stretch since at least 1971, according to data compiled by Bloomberg.

The SNB, which expects consumer prices to fall 0.2 percent this year, has “no reason” to discuss an exit from the cap, considering the need to keep prices stable and the chance of the euro-area crisis flaring up again, SNB President Thomas Jordan said on Sept. 19 when the central bank held its quarterly monetary policy review.

The cost of imported consumer goods rose 1 percent from the previous month and declined 2.1 percent from a year earlier, today’s report showed. Prices of domestic goods rose 0.1 percent from August and 0.7 percent from a year earlier.

Under a European Union harmonized method, Swiss consumer prices advanced 0.5 percent from the previous month and 0.2 percent from September 2012, according to the statement.

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