The combined producer and import price index remained unchanged in December following a 0.6 percent monthly drop in November. However, positive base effects saw the annual inflation rate rise from minus 1.5 percent to minus 0.9 percent.

Domestic prices rose 0.1 percent on the month, with the yearly rate edging up from minus 0.4 percent to 0.1 percent. Import prices, however, were down 0.1 percent on the month, but base effects still eased the annual rate of decline from minus 3.8 percent to minus 2.6 percent.

Within the PPI, the main monthly increases were posted by food products, beverages and tobacco products (0.8 percent), while the main declines were posted by petroleum products (minus 1.4 percent) and water treatment and distribution, waste collection, recovery (minus 1.2 percent). Import prices were driven lower mainly by chemical and pharmaceutical products, which slumped 0.8 percent. Total core prices were unchanged on the month while the annual underlying inflation rate remained unchanged at minus 1.0 percent.

The average annual inflation for 2024 was minus 1.7 percent, following 0.2 percent in 2023 and 5.6 percent in 2022. The decline compared to 2023 was mainly due to lower prices for petroleum and natural gas, petroleum products and chemical products but most especially the fall in prices of pharmaceutical products. Conversely, electricity prices rose. Domestic producer prices fell 0.5 percent and import prices fell by 4.0 percent in 2024.

The producer price and import price index focuses on the actual prices of products on the market (transaction price) at the time of the order. The prices of domestic products are taken at the producer or factory level, excluding value added tax and consumption taxes. For imports, prices are collected at the Swiss border, without the value added tax, taxes on consumption and tariffs. Changes in the index provide a guide to inflation from the point of view of the product's producer/manufacturer

The producer price and import price index measures prices at the producer level before they are passed along to consumers. Since the producer price index measures prices of consumer goods and capital equipment, a portion of the inflation at the producer level gets passed through to the consumer price index (CPI). By tracking price pressures in the pipeline, investors can anticipate inflationary consequences in coming months. Producer and import prices are more volatile than consumer prices. While the CPI is the price index with the most impact in setting interest rates, the producer price and import price index provides significant information earlier in the production process. The producer price and import price index is considered a precursor of both consumer price inflation and profits. If the prices paid to manufacturers increase, businesses are faced with either charging higher prices or they taking a cut in profits. The ability to pass along price increases depends on the strength and competitiveness of the marketplace. The bond market rallies when the producer price and import price index decreases or posts only small increases, but bond prices fall when the index posts larger-than-expected gains. The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.