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More expensive rents, higher electricity prices and VAT: Thomas Jordan says in “ECO Talk” what it will cost us in 2024.
Many things have become more expensive again in the new year: electricity, VAT, public transport, and rents are also rising. Inflation rose to 1.7 percent in December compared to the previous month.
What’s next? Thomas Jordan, President of the Swiss National Bank (SNB), says in “ECO Talk”: “We don’t have the numbers for January yet, but our expectation is that inflation will rise slightly again.”
However, inflation should not rise above two percent, according to the base scenario – i.e. the SNB’s inflation forecast.
Has the battle against inflation been won?
Although inflation has risen slightly, it is significantly lower in Switzerland than in the euro area. Will the SNB soon announce further interest rate cuts? Jordan says: “The inflation forecast has improved and things are actually looking relatively good now.”
The National Bank will reassess the situation in March. He doesn’t let anyone get any more information out of him, including whether the fight against inflation has already been won. “There can always be surprises” because of second-round effects, energy could become more expensive again.
For the whole of 2024, Jordan expects inflation to be just under two percent – and thus within the price stability defined by the SNB.
Will cash soon become extinct?
Another issue that concerns the National Bank is cash. 95 percent of the population still want to use this, according to the SNB’s current payment methods survey. This is despite the fact that credit cards and mobile phones are becoming increasingly popular for payments.
But a current study by the University of St. Gallen shows that cash causes significantly higher costs for retailers, the financial sector and consumers than other means of payment.
Cash will no longer be used as a means of payment in 2043 – purely mathematically. This is what Tobias Trütsch, a researcher at the University of St. Gallen, says in view of the trend of declining cash.
The SNB wants to continue to make cash available in the future, said Thomas Jordan, but it is above all important that this is used and that companies accept and make cash available. The challenge: “How can we ensure that the supply and acceptance of cash, but also the use of cash, remains at a good level?”
Jordan personally admits that he mostly pays for his purchases by card or Twint, “but sometimes also with cash.”