Housing, energy costs drive up inflation in Switzerland

Excluding rent, which rose by 1.4%, inflation would have been zero, according to the Federal Statistical Office. Keystone / Gaetan Bally

Consumer prices in Switzerland rose by 0.3% year-on-year in March, driven primarily by housing costs, says the Federal Statistical Office. Inflation had previously peaked at 0.1% in both January and February.

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Accounting for a good quarter of household expenditure, housing and energy costs rose by 1.3%, the Statistical Office indicated in a report published on Thursday. Healthcare and transportation, by contrast, recorded falls of 0.2% and 0.8%, with respective weightings of 17% and 11%.

Excluding rent, which rose by 1.4%, inflation would have been zero, according to the Federal Statistical Office.

+ Rising rents are heavy burden on many Swiss households

On a month-on-month basis, the consumer price index rose by 0.2%. The cost of petroleum products rose by more than 10%, but account for only 2.1% of the expenditure taken into account by federal statisticians.

The rise remains modest compared with the forecasts of economists surveyed by the AWP news agency, who had predicted figures ranging from 0.3% to 0.6%.

An island of stability

Inflation in Switzerland remains significantly more moderate than in neighbouring countries, with the eurozone reporting on Wednesday a year-on-year rise of 2.5% in March, following 1.9% in February.

“The modest rise in inflation in March […] confirms Switzerland’s relative resilience to the oil shock,” said GianLuigi Mandruzzato, an economist at EFG, who also highlighted the low weighting of fuel prices in the consumer price index.

“Price dynamics remain dominated by domestic factors,” said Arthur Jurus, head of investment at Oddo BHF Switzerland, citing rent as the primary driver. “Imported goods continue to exert deflationary pressure, driven by a structurally strong franc,” he added.

Translated from French with AI/gw

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