Consumer prices in Switzerland remained unchanged year-on-year in April 2025, following a modest 0.3% increase in March, and defying forecasts of a 0.2% rise. This marked the lowest inflation reading since the deflation recorded in March 2021, reflecting persistent deflationary pressures in several key categories of consumer goods.
Swiss consumer prices stall in April
The overall stagnation was driven by significant declines in prices for food and non-alcoholic beverages (-0.8% vs. -0.2% in March), household goods and services (-2.2% vs. -0.2%), and transport (-2.6% vs. -2.1%), suggesting that Swiss consumers continue to face downward price pressures in everyday essentials and services. The persistent weakness in these sectors points to ongoing challenges in demand, despite the broader global recovery.
However, these declines were offset by price increases in other sectors, notably housing and energy, which remained steady at +1.4%, reflecting the higher costs associated with rent, utilities, and the energy transition. The communication sector also saw a rise of 1% compared to 0.7% in March, reflecting growing costs for telecommunications and digital services. Similarly, prices for restaurants and hotels remained unchanged at +1.6%, pointing to stable demand in the hospitality sector despite broader economic uncertainty.
Core inflation eases
Core inflation, which excludes volatile items like unprocessed food and energy, eased to 0.6% in April, down from 0.9% in March, signaling that underlying inflationary pressures remain subdued. This indicates that the Swiss economy, while not in outright deflation, is still grappling with muted inflation despite the ongoing global recovery and higher energy costs. On a monthly basis, the consumer price index remained flat, matching the previous period’s pace and contrasting with forecasts of a 0.2% increase. This suggests that there is limited upward momentum in consumer prices, reflecting both domestic factors—such as weak consumer demand and lower input costs—and global influences, including subdued commodity prices and a relatively stable Swiss franc.
The overall inflationary environment in Switzerland could influence the Swiss National Bank’s policy stance in the coming months. While the central bank has generally favored a cautious approach, the ongoing lack of inflationary pressure, especially in core sectors, may limit its ability to justify significant policy tightening in the near term. In turn, the Swiss economy may continue to navigate a delicate balance between fostering growth while avoiding price spirals, with the central bank remaining vigilant about any potential signs of inflationary acceleration.
