Switzerland deflation could accelerate?

SNB used the oil price as the reason for the new, more pessimistic inflation outlook for Switzerland. But, it is not the short term negative inflation shocks in themselves that cause a problem for the SNB. 

"The problem is that deflation could accelerate. Even eight months after the release of the EUR-CHF exchange rate deflation pressure persists. In an environment such as that exogenous effects (such as oil price fluctuations) are dangerous", says Commerzbank.

They increase the likelihood of a self-reinforcing deflation spiral being activated. The reference to the oil price is most definitely not suitable as an excuse for missing targets. 

And indeed the SNB had to notably lower its inflation outlook. The new path only bottoms at -1.5%. Following that, so the SNB hopes, things will look up again. One would certainly hope so for the Swiss economy. 

"But the prospects are not good. First of all the low inflation expectations have to be overcome. But how is that to be achieved is a concern as everyone knows that the SNB has run out of options", added Commerzbank.