The composite producer and import price index fell 0.3 percent on the month in May. This was its third decline in the last four months and, with base effects quite negative, enough to lower the annual inflation rate by 0.7 percentage points to 0.1 percent.
The monthly decrease in the headline index reflected mainly a 0.4 percent drop in producer prices and, to a lesser extent, a 0.1 percent dip in import prices. Within the former, the main negative impact was made chemicals and pharmaceuticals where a 1.6 percent slide alone subtracted 0.4 percentage points. Petrol (minus 5.3 percent) also weighed significantly but partial offsets were provided by glass, ceramics, stone and earth processing, and rubber and plastic products (both 0.5 percent).
The underlying composite index was down a further 0.2 percent versus April when it dropped 0.1 percent. As a result, the yearly core rate slipped from minus 0.4 percent to minus 0.5 percent. Coming just ahead of the SNB's quarterly monetary policy statement today's pipeline prices update provides another reminder that underlying inflation trends remain worryingly soft.