Data published by the Federal Statistical Office on 5 June 2023 shows inflation was 0.3% over the month of May 2023, an annualised rate of 3.6%.
The 0.3% rise in prices in May follows zero inflation in April 2023. Across the 12 months up until the end of May, inflation was 2.3%, compared to 2.7% in April. However, the decline in annual rate hides the monthly uptick of 0.3%. The annual fall is due to the base effect. The monthly inflation rate was relatively high during the first five months of 2022. As these months drop out of the annual inflation figure they bring down the annual rate. If inflation during the month falling off the back is higher – it was 0.7% in May 2022 – than inflation in the latest month (0.3%) then the annual rate will fall.
Broad categories rising most significantly in May 2023 included food (+1.7%), alcoholic beverages and tobacco (+0.6%) and clothing and footwear (+0.6%). The only broad category falling in price was transport (-0.4%). Healthcare, communications, education and hotels and restaurants saw zero monthly inflation. Housing and energy (+0.1%), household goods and services (+0.1%), recreation and culture (+0.3%) and other goods and services (+0.5%) saw modest rises.
At a more detailed level the sharpest price rises were for fresh and seasonal foods (+2.5%), alcoholic beverages (+0.9%), clothing and footwear (+0.6%) and rent (+0.4%). The only price decline at this level was for petroleum products (-2.5%). Diesel in particular was notably cheaper (-3.3%). The cost of air transport was also down 3.4% over the month.
The Swiss National Bank will be looking closely at this inflation data ahead of its next interest rate decision on 22 June 2023. Since June 2022, when the Swiss National Bank (SNB) started raising its policy rate, the rate has climbed 2.25 percentage points from -0.75% to 1.50%. Some analysts expect the SNB to raise the rate to 1.75% as it has hinted it might.