Swiss consumer prices fall for first time since 2021
By Benjamin Chiou
Date: Tuesday 03 Jun 2025
(Sharecast News) - Consumer prices in Switzerland declined year-on-year for the first time in four years in May, according to the Federal Statistical Office on Tuesday, raising the odds of another interest-rate cut.
The consumer price index rose by 0.1% over the month of May, after two months of no growth, however the annual change came in at -0.1% after a steady reading in April.
This was the first time the country has seen deflation in annual terms since March 2021 - though in line with analysts' expectations.
It is thought that a rising franc resulted in lower prices for imported products, as geopolitical uncertainty - owing mainly to the US tariff war - saw investors seek out the safe-haven Swiss currency. Falling energy prices also helped push import prices lower.
Compared with May 2024, the biggest price increases were in alcohol and tobacco (+1.6%), restaurants and hotels (+1.3%) housing and energy (+1.1%), offset by steep falls in transport prices (-3.7%), household goods and services (-2.6%) and to a lesser extend food and drink (-0.3%).
Speaking before the data was released, Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said that the economy slipping into deflation will "fuel expectations that the Swiss National Bank could cut rates back to 0% this month".
The SNB's key policy rate is currently at 0.25%, after being cut in March to its lowest since September 2022, marking the fifth cut in the current cycle since rates peaked at 1.75% between 2023 and 2024.
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