In Switzerland, too, prices continue to rise. The inflation rate rose to 3.5 percent in August. That’s high by Swiss standards. However, inflation is well below the level in other countries.
Shopping is becoming more expensive – also in Switzerland.
Inflation rates are reaching record highs in Europe and the US. In the euro zone, it climbed to 9.1 percent in August. In the US, the inflation rate was 8.5 percent in July.
Life is becoming more expensive in Switzerland too – driven by energy prices, just like elsewhere. Nevertheless, Switzerland remains a special case. Inflation is increasing, but only to 3.5 percent (compared to the previous year), as the Federal Statistical Office announced on Thursday.
The national index of consumer prices rose by 0.3 percent in August 2022 compared to the previous month, reaching 104.8 points (December 2020 = 100). This month-on-month increase is due to several factors, such as more expensive food or higher prices for inpatient hospital services. The prices for social facilities have also risen, as have those for renting apartments. The prices for renting private transport, on the other hand, have fallen, as have those for laboratory analyzes and fuel.
The drivers of inflation continue to be imported goods, which were 8.6 percent more expensive than a year ago. In the case of domestic goods, on the other hand, annual inflation was only 1.8 percent. In a year-on-year comparison, the rise in prices for petroleum products is particularly strong, with a plus of 42.3 percent.
Why isn’t inflation rising faster in Switzerland? Inflation of 3.5 percent is not small for Switzerland. Here is an example: Anyone who earns 8,000 francs and does not receive a wage increase effectively only has a little more than 7,700 francs left in their sack at the end of the year.
Why is inflation lower in Switzerland than elsewhere?
There are several reasons why inflation in this country is far below the level in other countries:
- The moderate increase has a lot to do with the strong Swiss franc. In recent months, it has increased significantly in nominal terms in relation to the euro, the currency of our most important trading partner. This makes imports cheaper across the board. The strong Swiss franc helps the Swiss to have high purchasing power internationally. And imported goods are the main drivers of inflation.
- In addition, the Swiss economy is more energy-efficient than, for example, those in the USA or Germany. In this country, less energy is needed to produce goods and services. According to Analysis by Economiesuisse Germany, for example, needs more than twice as much energy to produce goods and services as Switzerland.
- In Switzerland, consumers spend less money on fossil fuels than people in Germany or the USA. Because wages are slightly higher here, fossil fuels account for a smaller proportion of all goods and services purchased. The weight of fossil fuels and heating materials in the Swiss national index of consumer prices is therefore only 3.03 percent. In Germany, this share is 7.11 percent, in the USA it is 4.97 percent.
- Fossil energies are also subject to higher taxes in Switzerland than elsewhere. For example, it is 76.32 centimes for diesel. This accounts for a large proportion of the final price. Consequently, when international oil prices rise, this has less of an impact on the final price, since the taxes remain the same.