Ekonomické zprávy
06.03.2023

Swiss consumer price growth unexpectedly accelerated in February

Data published by the Federal Statistical Office (FSO) showed that consumer price growth accelerated to 3.4% per year in February, compared with 3.3% in December. Economists had expected consumer price growth to slow to 3.1%. On a monthly basis, consumer prices increased by 0.7% after a 0.6% rose in January. Consensus estimates suggested an increase of 0.4% per annum.

The FSO reported that the monthly increase was due to several factors including rising prices for air transport, package holidays and supplementary accommodation. Housing rentals also recorded a price increase, as did petrol. In contrast, prices for heating oil decreased as well as those for new cars and berries.

The data also showed that in February, the harmonized index of consumer prices (HICP) - an indicator that allows to compare inflation in Switzerland with inflation in European countries - grew by 0.5% on a monthly basis and by 3.2% per annum.

The SNB expects inflation to average 2.4% in 2023 and 1.8% in 2024. These above-target inflation forecasts for the end of the forecast horizon signal that the SNB is not done with monetary tightening. Thus, a further 0.5% rate hike could take place at the March meeting .

"An end to the hiking cycle at that stage would require the 2025 inflation projection (which will be conditional on the new policy rate) to remain consistently below the upper end of the target range of 2%, and not show acceleration," UBS experts said.

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