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Swiss Producer and Import Price Index in May 2020: -4.5 percent YoY, -0.5 percent MoM

Summary:
The Producer Price Index (PPI) or officially named “Producer and Import Price Index” describes the changes in prices for producers and importers. For us it is interesting because it is used in the formula for the Real Effective Exchange Rate. When producers and importers profit on lower price changes when compared to other countries, then the Swiss Franc reduces its overvaluation. The Swiss PPI values of -6% in 2015 (see below), compared to -3% in Europe or -1% in the U.S., diminished the overvaluation. In 2017, however, producer prices are rising again – in both Europe and Switzerland. See more in Is the Swiss Franc overvalued? 15.06.2020 – The Producer and Import Price Index fell in May 2020 by 0.5% compared with the previous month, reaching 97.6 points

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The Producer Price Index (PPI) or officially named “Producer and Import Price Index” describes the changes in prices for producers and importers. For us it is interesting because it is used in the formula for the Real Effective Exchange Rate. When producers and importers profit on lower price changes when compared to other countries, then the Swiss Franc reduces its overvaluation. The Swiss PPI values of -6% in 2015 (see below), compared to -3% in Europe or -1% in the U.S., diminished the overvaluation. In 2017, however, producer prices are rising again – in both Europe and Switzerland. See more in Is the Swiss Franc overvalued?

15.06.2020 – The Producer and Import Price Index fell in May 2020 by 0.5% compared with the previous month, reaching 97.6 points (December 2015 = 100). This decline is due in particular to lower prices for pharmaceutical and chemical products as well as for petroleum products. Compared with May 2019, the price level of the whole range of domestic and imported products fell by 4.5%. These are the results of the Federal Statistical Office (FSO).

In particular, lower prices for pharmaceutical preparations and basic pharmaceutical products were responsible for the decrease in the producer price index compared with the previous month. In contrast, rising prices were seen for waste collection and materials recovery.

The import price index registered lower prices compared with April 2020, particularly for petroleum products, chemical products as well as for petroleum and natural gas. The prices of rubber and plastic products also fell, as did prices for basic metals, semi-finished products and other special purpose machinery. In contrast, fresh vegetables and citrus fruit were more expensive.

Switzerland Producer Price Index (PPI) YoY, May 2020

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Swiss Producer and Import Price Index in May 2020: -4.5 percent YoY, -0.5 percent MoM

Source: investing.com - Click to enlarge


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George Dorgan
George Dorgan (penname) predicted the end of the EUR/CHF peg at the CFA Society and at many occasions on SeekingAlpha.com and on this blog. Several Swiss and international financial advisors support the site. These firms aim to deliver independent advice from the often misleading mainstream of banks and asset managers. George is FinTech entrepreneur, financial author and alternative economist. He speak seven languages fluently.

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