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Swiss consumer prices were fractionally lower in March than a year earlier, with declines in clothing and shoe costs dragging the overall index to a 20-month low, data showed on Thursday.
However, the 0.1 percent decline in prices from a year earlier had been expected by economists, who say a sustained period of falling prices is unlikely in the recovering Swiss economy.
The Federal Statistics Office said consumer prices rose 0.2 percent from February, in line with economists' expectations. The figures are not seasonally adjusted.
The office said the yearly decline matched that seen in July 2002 and could be explained by basis effects. Core inflation - which strips out volatile food, drink and oil prices - was 0.2 percent year-on-year in March.
Economists say the Swiss National Bank will be watching price levels closely for signs that its policy of near-zero interest rates could stoke inflation as the Swiss economic recovery begins to pick up speed.

Copyright Reuters, 2004

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