Return to Switzerland

Consumer prices left from the front (illustration image).Image: Shutterstock

Inflation rebounds in June. It increased by 0.1% over one year and 0.2% compared to the previous month. Housing costs are the main responsible.

Consumer prices left from front to June in Switzerland, after having made a brief foray into negative territory the previous month. The acceleration of prices for local products has compensated for the strong decline in costs for imported food.

In June, inflation increased by 0.1% over a year and 0.2% compared to the previous month, the Federal Statistics Office (FSA) announced in a statement on Thursday.

These data are at the top of the forecast range. Economists interviewed by the AWP agency provided for an inflation rate between -0.1% and +0.1% over one year and from 0.0% to +0.2% in monthly variation.

The rents accelerate

While local products prices increased by 0.7% compared to June 2024, those of imported products fell 1.9%. This decline is explained by the withdrawal of oil prices and the appreciation of the franc, especially against the dollar, which makes the food imported less expensive.

Among the product categories, the largest decreases were observed in car rental (-19%over a year), air transport (-11.2%) and petrol (-9.7%).

Conversely, rents, the main position of expenditure of the Swiss, accelerated by 2.6% over one year. Some foodstuffs have also seen their prices fly away, including fruits and vegetables (+10.7%), onions and leeks (+11.9%) and nucleus fruits (+6.7%).

Inflation again joins the area that the Swiss National Bank (BNS) assimilates to prices stability, a consumer price index (IPC) between 0% and 2%. To defend this objective, it had lowered its key rate from 25 basic points at 0%in mid-June, thus encouraging companies and individuals to consumption rather than savings.

Inflationary pressures

In May, inflation had switched to negative territory, standing at -0.1% over a year for the first time since March 2021. For this year, the majority of economists have been in inflation between 0.1% and 0.3% and in 2026 from 0.2% to 0.9%.

“Except for rents, Swiss inflation would be negative at -0.5% over a year, translating a deflation situation on almost all other goods and services,” said Arthur Jurus, director of investments at ODDO BHF Switzerland.

For Jurus, “the increase in rents prevents the IPC from diving, making housing costs the main focus of inflation in Switzerland and leaving the persistence of inflationary pressures as long as the housing crisis is not resolved”. (JZS/ATS)

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