Consumer prices remained stable in July. While the consumer price index (IPC) stagnated at 107.8 points with regard to June, the increase reached 0.2% over a year.
Like the previous month, the acceleration of prices for local products has compensated for the more marked decline in costs for imported goods.
The stability of the index compared to the previous month results from opposite trends, which were on the whole compensated, wrote on Monday the Federal Statistics Office (OFS) in a press release. The underlying inflation, without fresh and seasonal products as well as energy and fuels, contracted by 0.1% over a month and increased by 0.8% in the space of one year.
The data has proven to be in line with expectations. Economists surveyed by the AWP agency had indeed broke on an inflation rate between 0.0% and 0.1% over one year. However, the monthly variation has proven to be stronger than expected, experts having bet on a value between -0.3% and -0.2%.
While local products prices increased by 0.7% compared to July 2024, those of imported products dropped by 1.4%. The settlement reflects in particular the withdrawal of oil prices and the appreciation of the franc, in particular against the dollar, the vigor of the Swiss currency making the food imported less expensive.
The rents have not finished weighing
Among the product categories, the largest decreases were observed for the price of fuel oil (-12.7%over one year), petrol (-8.2%), air transport (-6%) and car rental (-4.2%).
While food prices and non -alcoholic beverages flexed 0.6% in the space of twelve months, those of chocolate were in parallel for 13.7%. The rents, the main post of expenditure of a majority of Swiss, increased by 2.6% over a year, now the pace already observed in June. Adjusted from this last element, inflation fell 0.3%.
Reporting the demand from the acquisition market to the rental market. The current drop in mortgage benchmark interest rates will have little effect this year on the average rent prices in Switzerland, adds the expert.
Inflation has remained in the area that the Swiss National Bank (BNS) assimilates to prices stability, that is a consumer price index (IPC) between 0% and 2%. To defend this objective, the emission institute had lowered its key rate from 25 basic points at 0%in mid-June, thus encouraging companies and individuals to consumption rather than savings.
Negative rate in view
From the end of September, the BNS could decide a new drop in its key rate and a transition to negative territory at -0.25%, for several structural and technical reasons, notes Mr. Jurus. First, the Swiss economic environment remains marked by a very low inflation, a continuous assessment of the franc, while trade tensions weigh on exports. In this context, a negative rate would constitute a defensive tool to loosen the financial conditions and avoid an unwanted monetary tightening.
Especially since the Swiss central bank prepared the ground for a return to negative rates, as shown by its current differentiated remuneration policy, continues Arthur Jurus. Since June 2025, although the key rate has been officially 0%, excess police deposits (beyond the thresholds allocated to banks) have been remunerated at -0.25%. This mechanism keeps the saron slightly in negative territory (around -0.05 %), while retaining an operational room for maneuver.
/ATS