Inflation in Switzerland – Despite the decline in inflation: it remains critical for poor people – News

Swiss consumers have been struggling with high prices for months. The situation remains tense. What does inflation mean for people affected by poverty – and can we breathe a sigh of relief soon?

Inflation in Switzerland fell slightly in April. Can people affected by poverty breathe a sigh of relief now? No, for them the latest figures are cold consolation. After all, these people spend most of their money on housing and energy, health, transport and food. These fixed costs are difficult to reduce and remain high. In addition, health insurance premiums are increasing. And what is often forgotten: next year, the federal government will increase VAT.

Who or what is primarily driving inflation? It’s a mix. What can be said: The Ukraine war and the sanctions against Russia have fueled inflation significantly. Energy prices shot through the roof. However, that has calmed down a bit lately. But: Inflation started long before that, namely with the corona pandemic. Problems with the supply chains and production caused a shortage of goods. This also caused prices to rise.

After Corona, large companies were able to significantly increase their profit margins. This further fueled inflation. Is this a recent phenomenon? No, the accusation of price gouging and greed for profit was widely discussed last year. This is primarily about companies in the energy sector. In fact, some of these have doubled their margins without increasing operating costs. Critics complain that such corporations have maximized their profits under the guise of inflation. On a broad front, however, the phenomenon cannot be proven so clearly.

The Swiss National Bank is trying to do something about inflation and is raising interest rates. Does it work? Partially. However, Thomas Jordan, President of the Swiss National Bank, is concerned that more and more goods and services will be affected by inflation. In addition to groceries, rent or energy, for example, the mobile phone subscription. So far, it has been primarily imported goods that have been affected by the inflation. This imported price increase was cushioned somewhat by the strong Swiss franc. But: That doesn’t help much with the goods and services that we produce here in Switzerland. And the prices have gone up there too.

Compared to other countries, inflation in Switzerland is moderate: What else can we expect in terms of prices this year? The Economic Research Center at ETH Zurich is also anticipating a slight decline in inflation in the coming months. But towards the end of the year, inflation could pick up again because the mortgage reference interest rate is likely to rise. And that means rents are going up too, which puts a further strain on our household budget.