Nomura Lowers Swiss Inflation Forecast Amid Slowing CPI Growth

Nomura strategists are revising their inflation forecast for Switzerland, citing slower-than-expected Consumer Price Index (CPI) growth. In July, the Swiss CPI slowed to 0.4% year-over-year, down from 0.5% in June and below the consensus estimate of 0.4%. The slowdown was largely due to weaker car fuel prices and easing imported energy costs.

Core inflation remained steady at 0.3% year-over-year, while domestic prices increased 0.5% year-over-year. Imported product prices were unchanged from a year earlier as imported energy cost pressures have eased after adding to inflation in recent months due to the Iran war.

Nomura now expects Swiss inflation to average 0.5% year-over-year for Q3, down 0.2 percentage points from the Swiss National Bank's (SNB) forecast of 0.7%. The SNB's latest forecast is for inflation to average 0.7% year-over-year across Q3.

The Nomura strategists note that car fuel prices contributed to the slowdown in Swiss inflation in July and expect inflation in Q3 to print below the SNB's forecast.