Swiss April CPI rose 0.9% m/m, which brought the annual rate up to -0.3% y/y from -0.4% y/y in March. We had been looking for a rise of 0.4% m/m and the Bloomberg median was 0.6% m/m, so data were much higher than anticipated. Sharp increases in prices for clothing and shoes were one of the drivers behind the monthly gain, as was the rebound in oil prices, which lifted transport prices by 1.1% m/m in April. However, the annual rate remains in negative territory, which backs SNB Roth's warning that the economy is "on the edge of a deflationary development". In the light of very low growth and inflation the central bank is expected to continue to pursue its expansionary monetary policy for the rest of the year.
Al Bawaba
