Swiss producer and import price deflation deepens

Switzerland’s producer and import prices fell 0.9% year-on-year in July 2025, slipping further from the 0.7% drop recorded in June and marking the sharpest annual decline since December 2024.

This was the 27th consecutive month of contraction, underscoring persistent deflationary pressures in the country’s upstream price environment. The sustained weakness reflects both subdued global commodity trends and soft domestic demand, as businesses continue to face headwinds from a challenging external trade environment.

Imports remained the key drag, falling 2.8% from a year earlier — unchanged from June’s pace — as lower global prices for many industrial inputs and consumer goods continued to filter through.

Producer prices, which had posted a modest 0.3% annual increase in June, showed no growth in July, signaling that domestic output prices have also flattened under the weight of weak pricing power among manufacturers.

On a monthly basis, combined producer and import prices fell 0.2% in July after a 0.1% decline in June, indicating a slight acceleration in downward momentum. The latest drop was driven mainly by lower prices for watches — a key Swiss export — and for medical and dental instruments and supplies, both of which faced softer international demand and competitive pricing pressures.

These declines were partially offset by higher costs for petroleum, natural gas, and refined petroleum products, reflecting the recent rebound in global energy markets. However, the modest increase in energy costs was not enough to reverse the overall downward trend in upstream prices.

The continued deflation in producer and import prices could keep overall inflation subdued in the months ahead, reinforcing expectations that the Swiss National Bank will maintain an accommodative stance to support domestic activity.

While lower input costs can ease pressure on businesses, they may also reflect weaker external demand, particularly from key European and Asian trade partners. If price declines persist into the autumn, concerns over profit margins in export-oriented sectors could deepen, especially for industries heavily exposed to competitive global markets.