Import prices in Switzerland rose 6.4 per cent over the past 12 months ending in April. Much of that rise was due to the massive hike in the price of oil. But it was down from the seven per cent increase in the year to March.

Analysts are predicting that the higher costs will be passed on to consumers, leading to an increase in inflationary pressures. However, the Swiss National Bank is forecasting that inflation will average only 1.5 per cent for the year.

"I assume the National Bank prefers a mixture of both a stronger Swiss franc - to keep inflation down - as well as higher interest rates to dampen domestic demand, especially in the construction sector," said Marcus Allenspach, an analyst at Cantrade private bank.

The latest figures from the Federal Statistics Office show that producer prices in Switzerland are remaining stable. These are the cost of finished goods being sold to retailers. They rose just 0.1 per cent in the month of April, or 1.3 per cent in the past 12 months.


by Tom O'Brien

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