Swiss consumer prices extended their longest slump in at least four decades in January even as the franc declined against the euro.
Prices fell 0.3 percent from a year earlier after dropping 0.4 percent in December, the Federal Statistics Office in Neuchatel said in an e-mailed statement today. That’s the 16th straight month of annual declines, the longest stretch since at least 1971, according to data compiled by Bloomberg. Prices were down 0.3 percent in the month. Economists expected both an annual and a monthly decline of 0.3 percent, according to the median of separate estimates in a Bloomberg News survey.
Prices have continued to fall even after the Swiss National Bank imposed a franc ceiling of 1.20 versus the euro in September 2011 to fight deflation threats. The statistics office sees inflation at 0.2 percent in 2013 and 2014, while the SNB sees prices slipping 0.1 percent this year, before rising 0.4 percent in 2014, according to two separate December forecasts.
While the Swiss currency has weakened 1.8 percent this year on signs that the Europe’s debt crisis is easing, SNB Governing Board member Fritz Zurbruegg still sees the franc as “overvalued,” according to an interview with Aargauer Zeitung newspaper published yesterday.
The cost of Swiss imported consumer goods dropped 1.7 percent from a year earlier and 1.5 percent from December, today’s report showed. Prices of domestic goods were up 0.2 percent in the year and in the month.
Switzerland didn’t publish consumer prices under a European Union harmonized method this month.
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