by Data published this week by Switzerland’s Federal Statistical Office (FSO) showed a small slowdown in annual inflation. Photo by Sam Lion on Pexels.comThe consumer price index (CPI) increased by 0.2% in March 2023 compared with the previous month, and +2.9% compared with the same month of the previous year. This compares to an annual rate of 3.4% at the end of February 2023. The slowdown in price rises was mainly due to falling energy, some holiday accommodation and specific food prices, for example fruit. Switzerland has dodged much of the inflation that has hit Europe and the rest of the world. This is due to a number of factors, which include a rising Swiss franc, something that reduces imported inflation. The Swiss franc has jumped 13% against the Euro since its low point in
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Data published this week by Switzerland’s Federal Statistical Office (FSO) showed a small slowdown in annual inflation.
The consumer price index (CPI) increased by 0.2% in March 2023 compared with the previous month, and +2.9% compared with the same month of the previous year. This compares to an annual rate of 3.4% at the end of February 2023.
The slowdown in price rises was mainly due to falling energy, some holiday accommodation and specific food prices, for example fruit.
Switzerland has dodged much of the inflation that has hit Europe and the rest of the world. This is due to a number of factors, which include a rising Swiss franc, something that reduces imported inflation. The Swiss franc has jumped 13% against the Euro since its low point in 2021. In addition, Switzerland has had low or negative inflation for decades, so inflation expectations became habitually low.
Other factors include its CPI basket – the percentage of Switzerland’s basket devoted to pricy energy is half the wider European one, high agricultural protectionism – Swiss food prices are set nationally to a high degree, and government rules around price setting – Switzerland has the highest share (30%) of regulated prices in Europe, according to Bloomberg.
Another major factor is Switzerland’s central bank’s restraint on using quantitative easing (QE). Since 2015, Switzerland’s money supply (M3) has expanded by 22%. By comparison, in the US it has expanded by 77% and in the Eurozone by 52%, according to data published by Bloomberg.
At the same time, Switzerland’s inflation is expected to remain stubborn and further central bank interest rate rises remain a possibility. Switzerland’s tight job market remains an inflation-busting headache. Data published on 6 April 2023 show unemployment continuing to fall from 2.1% in February to 2.0% in March 2023. One year ago in March 2022, the rate was 2.4%.
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FSO press release (in French) – Take a 5 minute French test now
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