SNB says negative inflation rate is part of adjustment process
[ZURICH] Switzerland's negative inflation rate helps the economy to stand up to its rivals, according to Swiss National Bank board member Andrea Maechler.
Declining consumer prices are a "necessary part of the adjustment process to allow the Swiss economy to stay competitive," Maechler said on Tuesday at a conference in Lausanne that was hosted by newspaper Le Temps.
Prices slumped 1.1 per cent in 2015, the most since 1950. The SNB predicts they will fall an average of 0.5 per cent this year before rising 0.3 per cent in 2017. Maechler, who joined the central bank's board in July, confirmed that forecast on Tuesday.
The negative inflation rate is one of the fallouts of the SNB's unexpected move a year ago to abandoned its franc cap. That decision also proved a blow to Swiss exporters. While their situation remains difficult, they may benefit from a pickup in global growth, according to Maechler.
BLOOMBERG
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
International
Beijing city to subsidise domestic AI chips, targets self-reliance by 2027
China passes tariff law as tensions with trading partners simmer
Blinken meets Chinese counterpart Wang Yi in Beijing
South Korea’s public finances no longer a credit rating ‘strength’: Fitch
UK consumer confidence improves as inflation and taxes fall
Inflation in Japan’s capital falls below BOJ target, slows for second month