Swiss Oct Consumer Price Inflation Slows Less Than Anticipated

(RTTNews) - Tuesday, Switzerland’s consumer price inflation slowed less than expected in October, official data showed.

The Swiss Federal Statistical Office reported that consumer prices rose at a slower pace of 2.6% year-on-year in October compared with 2.9% rise seen in September. However, the rate of inflation was slightly higher than the expected rate of 2.5%, and 1.3% recorded in the same month of the previous year.

On a monthly basis, consumer prices rose 0.5% in October, quicker than 0.1% rise logged in the prior month and a 0.4% growth predicted by economists.

Clothing and footwear cost surged 17.4% in October from the previous month, while cost of semi durable goods moved up 9.3%. Housing and energy charges remained flat.

At the same time, large downward pressures came from petroleum product prices and transport and communications charges. Petroleum product prices were down 4.6% in October, while transport and communications charges were down 1.2% each.

The statistical office sees average annual inflation at 1.4% in 2009, down from 2.6% this year.

Earlier, a report from the KOF Swiss Economic Institute showed that the leading indicator fell to 0.35 in October, signaling a continued decline in the annual GDP growth rate for the coming months.

In its autumn forecast, the KOF projected sharp downturn in Swiss economic activity and sees GDP growth at just 0.3% next year. However, current downturn is expected to be less pronounced and considerably shorter-lived. The situation is predicted to improve after the first quarter of 2009.

On October 8, the Swiss National Bank in a coordinated move with other central banks like Bank of Canada, the European Central Bank, the US Federal Reserve, Sveriges Riksbank and Bank of England, had slashed key interest rates. The Swiss central bank decided to ease conditions in the money market by 50 basis points in a bid to bring down the Swiss franc three-month Libor to 2.5% from 3%.

The Swiss National Bank is expected to hold its next monetary policy meeting in December.

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Posted in Categories: Canada, Economy, Eurozone, Forex, Releases, Switzerland, UK, USA.

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