The stronger growth performance does not, in our view, represent a significant risk to price stability. The consequences of the global energy shock are visible in Switzerland, but they remain much less severe than in most other developed economies.<\/p>\n
Following the rise in global energy prices, headline inflation increased to 0.8% year-on-year in August, from 0.4% in July. This was largely driven by petroleum product prices, which were 25.2% higher than a year earlier. Nevertheless, inflation remains comfortably within the SNB\u2019s 0-2% inflation target.<\/p>\n
More importantly, underlying inflationary pressures remain extremely weak. Excluding petroleum products, Swiss inflation stood at just 0.3% year-on-year in August. This suggests that the energy shock has not translated into broad-based price pressures and that domestic second-round effects remain limited.<\/p>\n
The strength of the Swiss franc continues to play a considerable role in keeping inflation below that of Switzerland\u2019s main trading partners. By limiting the increase in the price of imported goods, the currency acts as an important buffer against global inflationary shocks. This mechanism is particularly powerful in Switzerland, where imported goods account for around 22% of the consumer price index. It also helps explain why the current energy shock is proving much less inflationary than elsewhere, as was already the case in 2022.<\/p>\n
However, the exchange-rate channel provided slightly less disinflationary support in August than in previous months. The franc has weakened moderately against the euro since the SNB\u2019s June meeting. This should provide some support to exporters and could put limited upward pressure on imported prices, but the currency remains strong by historical standards.<\/p>\n","protected":false},"excerpt":{"rendered":"The stronger growth performance does not, in our view, represent a significant risk to price stability. The consequences…\n","protected":false},"author":2,"featured_media":628687,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-628686","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/628686","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=628686"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/628686\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/628687"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=628686"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=628686"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=628686"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}