Swiss Retail Sales Drop, As Inflation Curbs Demand

Swiss retail sales fell 9.4% in April following a 9.7% gain the month prior. A slowing economy and rising inflation led to the first decline in almost two years. Inflation in trhe country jumped to 2.9% in May from 2.3% the month prior. A closer look at the breakdown shows that there were across the board declines with clothing leading the way with a 24.7% drop. Economist had predicted a 4.1% increase, but as rising food and energy prices sap consumer’s purchasing power and the economy slows, domestic demand may continue to falter. Growth in the country is expected to slow to between 1.5 and 2 percent from 3.1% in 2007. Thus, the central bank is expected to keep their benchmark interest rate unchanged at their June 19th policy meeting.

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