Switzerland’s CPI fell -0.1% mom in July, pulling annual inflation down to 0.4% from 0.5% in June, according to the Federal Statistical Office. The decline was largely driven by lower prices for air transport, diesel and petrol, while seasonal discounts also pushed clothing and footwear prices lower. Despite the softer headline reading, inflation remained positive on an annual basis, extending Switzerland’s low-inflation environment.
The broader breakdown suggests price pressures eased mainly through imported goods rather than domestic demand. Imported product prices fell -1.1% mom on the month, a much steeper decline than June’s -0.4% fall, leaving annual imported inflation at 0.0% yoy. By contrast, domestic product prices rose 0.1% mom on the month and held steady at 0.5% yoy, while core inflation remained unchanged at 0.3% yoy despite a -0.1% mom decline.
Not all price categories weakened during the month. The FSO said prices for other parahotel accommodation, heating oil, car rental and car sharing all increased, partially offsetting declines elsewhere. Overall, the July report reinforces the picture of subdued inflation in Switzerland, with lower energy and transport costs continuing to suppress headline inflation even as domestic price pressures remain relatively stable.
Economic Data
| Indicator | Actual | Previous |
|---|---|---|
| CPI (m/m) | -0.1% | 0.0% |
| CPI (y/y) | +0.4% | +0.5% |
| Core Inflation (m/m) | -0.1% | 0.0% |
| Core Inflation (y/y) | +0.3% | +0.3% |
| Domestic Products (m/m) | +0.1% | +0.1% |
| Domestic Products (y/y) | +0.5% | +0.5% |
| Imported Products (m/m) | -1.1% | -0.4% |
| Imported Products (y/y) | 0.0% | +0.2% |
Market Takeaways
- Headline CPI eased from +0.5% y/y to +0.4% y/y, while consumer prices fell 0.1% m/m, reflecting another month of subdued inflation.
- Lower airfares, diesel, petrol, and seasonal discounts on clothing and footwear were the main drivers of the monthly decline.
- Core inflation held steady at +0.3% y/y, suggesting underlying inflation pressures remained contained despite the softer monthly reading.
- Domestic inflation remained stable at +0.5% y/y, indicating price pressures generated within the Swiss economy have changed little.
- Imported prices were the main source of disinflation, falling 1.1% m/m and leaving annual imported inflation at 0.0%, highlighting the continued influence of lower energy and other imported costs.
- Higher prices for other parahotel accommodation, heating oil, car rental and car sharing only partly offset the broader decline in consumer prices.
