ZURICH — As many countries across the globe battle stubbornly high inflation, the rise in prices has been far less dramatic in Switzerland, a small mountainous nation in western Europe.
Inflation in Switzerland hit a 29-year high of 3.5% in 2022. While still high by Swiss standards, it is well below the double-digit rates of other advanced economies, like the U.S. (9.1%), the U.K. (11.1%) and the euro zone (10.6%).
“I think they feel it more abroad than here in Switzerland,” one shopper in Zurich told CNBC last month. “My mother is living in Germany, in Berlin, and she is telling me always [that] everything became so expensive.”
What are the factors that helped shelter Switzerland from rampant inflation? CNBC explores.
Prices starting from a high base
Switzerland is one of the world’s wealthiest countries, with a GDP per capita that outstrips that of other major economies, like the U.S., Japan and Germany.
It is also home to some of the richest citizens in the world, with a mean wealth of $696,604 per adult — and a steep cost-of-living to match.
The Swiss cities of Zurich and Geneva held steady among the world’s 10 most expensive cities last year, according to the Economist Intelligence Unit, even as inflation pushed up living costs in other pricey places, such as Singapore and New York.
The Swiss cities of Zurich and Geneva held steady in a ranking of the world’s most expensive cities in 2022.
CNBC
As a result, Swiss citizens are generally less impacted by price rises, as they tend to spend a lower proportion of their income on essentials such as food and accommodation, versus on discretionary items.
“Because people are on average quite rich, the share of food in the overall budget of households is not as big as maybe in other countries,” Tobias Straumann, professor of economic history at the University of Zurich, told CNBC.
“We also have inequality, of course. But, from an international perspective, we have, I think, a very well-functioning social policy,” he…
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