- CPI +0.6% vs +0.8% y/y expected
- Prior +0.6%
- Core CPI +0.3% y/y
- Prior +0.3%
Swiss headline annual inflation holds steady at 0.6% in May, with the monthly estimate showing a 0.2% increase in prices compared to April. The slight increase on the month was largely driven by rising
housing rentals and higher prices in the hotel sector, alongside higher petrol, car rental
and car sharing prices.
As for the core estimate, there was an increase of 0.1% on the month but the annual reading remains the same as in April at 0.3%.
This indicates that while there is some increase in price pressures in the Swiss economy from higher energy prices, it isn’t enough to really change the inflation outlook all too much for now.
Given time, we can expect a broadening in inflation pressures in the economy. But considering the low base to begin with, it’s not likely to materially shift the conversation for the SNB. That especially with the Swiss franc continuing to keep in a firmer position as a whole. Despite the rebound since March, EUR/CHF is still down 1.4% so far this year.
And a stronger currency will continue to fuel deflation fears, which remain the key risk for the SNB in the bigger picture.
