The combined producer and import price index rose 0.2 percent on the month in May. Following a 0.4 percent gain in April, this lifted the annual inflation rate from 2.7 percent to 3.2 percent, its highest mark in nearly a decade.
However, as seen in previous months, May's advance was dominated by import prices which jumped fully 1.2 percent versus April to stand 6.4 percent above their level a year ago. By contrast, domestic producer prices fell 0.3 percent for an annual rate of 1.6 percent, up just a tick from last time.
In fact, underlying developments were significantly weaker as sharply more expensive petrol added 0.1 percentage points to the monthly change in the PPI and some 0.4 percentage points to import prices. The core PPI fell 0.4 percent on the month and was only 0.9 percent higher on the year.
According, the underlying composite index was similarly soft, recording a 0.2 percent monthly decline and a 1.8 percent yearly rise, matching its April outturn. Today's report again highlights the importance of import prices to Swiss CPI inflation and, by extension, should reinforce the SNB's determination to prevent any renewed appreciation by the local currency.