Inflation dips to five-year low

Inflation in Switzerland has fallen to its lowest level in five years, according to the Federal Statistics Office.

The consumer price index dropped 0.4 per cent in March from last year, the first negative value in half a decade, confirming the Swiss National Bank’s concern that deflation could become a real risk.

Experts say a drop in oil prices is the main factor behind the disinflation – a decrease in the rate of inflation.

However prices of furniture, household equipment, alcohol and tobacco and at hotels and restaurants have all risen on the month.

Economists predict further declines in the coming months. The Statistics Office predicts an average annual rate of -0.2 per cent, while the central bank fixes it at -0.5 per cent.

The central bank has warned that consumer prices will probably fall this year due to declining energy prices as a result of the worldwide slump in demands as economic growth and production contracts.

swissinfo with agencies