RTTNews - Swiss producer and import prices declined more than expected in April, reflecting deflationary pressures in the economy.
The producer and import price index dropped 3.6% year-on-year in April due to a 7.6% contraction in import prices and a 1.5% decline in producer prices, the Federal Statistical Office reported Thursday. The decline in the index was quicker than a 2.8% fall forecast by economists.
According to the statistical office, prices declined mainly due to a sharp drop in prices for petroleum and metal products compared with the previous year.
On a monthly basis, the producer and import price index was down 0.2% in April, while it was expected to rise 0.8%. Producer prices were flat on month, while import prices slid 0.5%.
In April, consumer prices dropped 0.3% on a yearly basis, following a 0.4% decline in March. A year ago, the annual inflation rate stood at 2.3%. The decline witnessed in March was the biggest since December 1959.
Earlier in April, Swiss National Bank Vice-Chairman Philipp Hildebrand had said the central bank would continue to take all measures to prevent further strengthening of the Swiss franc and reduce deflationary pressures. It's about avoiding deflation by all means.
The European Commission projected a 4% contraction in European Union's GDP this year, making it the worst recession in the EU since World War II. However, the economy is expected to regain momentum in the course of 2010 with the impact of fiscal and monetary stimulus measures.
The Brussels-based commission estimates a 3.2% decline in Swiss GDP this year and 0.5% fall next year.
According to the survey of the State Secretariat for Economic Affairs, Swiss consumer confidence in the second quarter had deteriorated to the lowest level since 2003 as it was weighed down by rising concern over job security.
The commission assessed that the prospects for employment and wage income are declining but are likely remain slightly positive and will support consumer confidence.
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