ZURICH, Jan 8 (Reuters) - Swiss consumer price inflation eased more than expected in December as cheaper oil pushed heating and transport costs down, data showed on Thursday.
Consumer prices fell by 0.5 percent compared to November, taking the annual inflation rate down to 0.7 percent in December from 1.5 percent in the previous month, the Federal Statistics Office said.
The annual inflation rate was the lowest since September
2007 and well below the economists' median forecast of 1.0
percent in a Reuters poll.
"The monthly drop is still mainly due to falling prices for oil products," the office said.
Prices for transportation, housing and energy and also for clothes and shoes dropped by more than 1 percent on the month.
The average inflation rate in 2008 was 2.4 percent, the office said, which was the highest since 1993.
The SNB, which has slashed interest rates aggressively to support the slowing economy, expects inflation to fall to an average of 0.9 percent in 2009and 0.5 percent in 2010 as price pressure wane due to the economic downturn.
In addition, Switzerland's leading retail groups have entered a fresh round of price cuts as the imminent market entry of German discount chain Lidl is heightening competition.
The Purchasing Managers' Index (PMI) manufacturing survey also showed that companies saw costs declining. (Reporting by Sven Egenter; editing by Chris Pizzey)