by Upward pressure on prices continues in Switzerland. Recently published data show annual inflation rising to 3.3% to the end of January 2023, up from 2.8% at the end of 2022. © Sam Lee | Dreamstime.comPublic sector workers in parts of Switzerland have been demanding salary increases. In Vaud they have been demanding indexation. Looking back across a longer period of time Swiss inflation doesn’t look so bad. Between the end of 2010 and the end of 2022, prices have risen by 2.5%. Focusing on the 12 months to the end of January 2023 is misleading because it excludes three periods of deflation when prices fell by around a percent. For salary earners prices rises are painful and falling prices tend to be overlooked. This means falling prices rarely lead to salary reductions and pay
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Upward pressure on prices continues in Switzerland. Recently published data show annual inflation rising to 3.3% to the end of January 2023, up from 2.8% at the end of 2022.
Public sector workers in parts of Switzerland have been demanding salary increases. In Vaud they have been demanding indexation.
Looking back across a longer period of time Swiss inflation doesn’t look so bad. Between the end of 2010 and the end of 2022, prices have risen by 2.5%. Focusing on the 12 months to the end of January 2023 is misleading because it excludes three periods of deflation when prices fell by around a percent.
For salary earners prices rises are painful and falling prices tend to be overlooked. This means falling prices rarely lead to salary reductions and pay demands tend to focus only on recent inflation. This also makes negotiations difficult.
Another wrinkle is how poorly inflation measures fit some patterns of expenditure. Healthcare costs have risen substantially. For families such costs make up a larger share of expenditure than for those who are single. Individualised inflation calculations can be made on the Federal Statistical Office website. Standardised data show single people over 65 have experienced greater inflation over the last 23 years (15.8%) than an average household (+13%).
Those receiving state pensions in Switzerland can soon expect a long-term inflation busting increase. This week, the federal government decided to boost state pension payments by 2.8%, up from the 2.5% originally promised. A 2.8% boost is equivalent to inflation over 2022, however, it exceeds inflation since 2010 (+2.5%).
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