Rent and travel more expensive: inflation dropped significantly to 2.2 percent in May

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In particular, annual inflation fell to 2.2 percent in May 2023, from 2.6 percent in April, as the Federal Statistics Office (BFS) announced on Monday. It rose to 3.4 percent in the first two months due to rising electricity and flight prices, and has been falling rapidly since then.

The drop was as expected. Economists surveyed by the AWP news agency had estimated a value between 2.0 and 2.3 percent.

In May, domestic goods were 2.4 percent more expensive and imported goods were 1.4 percent more expensive compared to the previous year. This means that there is not as much increase in imported goods as in April. Core inflation, which does not include variable commodities such as food, energy and fuel, fell from 2.2 percent to 1.9 percent.

The national consumer price index (CPI) increased by 0.3 percent compared to the previous month to 106.3 points. Analysts surveyed by AWP had estimated a value between 0.0 and +0.4 percent.

Vegetables are more expensive, diesel is cheaper

According to BFS, the reason for the increase was, among other things, the increase in prices for apartment rentals and package tours abroad. As with many foods, the prices of fruits and root vegetables have increased.

On the other hand, air transport and non-hotel industry prices, as well as heating fuel and diesel prices fell. This reflects the slackening in the crude oil market.

The falling inflation is having an effect on the interest rate decision to be made by the Central Bank soon. This will be reported on June 22. It is possible that the SNB will be content with a small interest rate step and then suspend future rate hikes for now. (SDA/koh)

Source :Blick