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Swiss producer, import prices fall further in Feb

Published 03/13/2009, 05:21 AM
Updated 03/13/2009, 05:24 AM
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ZURICH, March 13 (Reuters) - Lower prices for metals and natural gas pushed combined Swiss producer and import prices lower in February, underscoring the necessity for the Swiss National Bank to take action to fight deflation.

Swiss producer and import prices fell 1.8 percent in February from a year ago and were 0.6 percent lower compared with the previous month, the Federal Statistics Office said on Friday.

The SNB, which cut interest rates to a historic low on Thursday, also said it would buy foreign currency to weaken the Swiss franc as it takes action against negative inflation. [ID:nLB459488]

"The data is very soft and highlights why the SNB is so keen to generate a weaker Swiss franc," said Deutsche Bank analyst Henrik Gullberg.

"Import prices were down 0.5 percent on the month and 5 percent on the year, so it is clear that while a weak domestic economy is not resulting in price pressures, imported goods are deflationary," he said.

For a factbox of the SNB's easing mteasures, click on [ID:nLC507202] (Reporting by Katie Reid)

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