How long will prices continue to rise?
Experts expect inflation to continue in Switzerland
Credit Suisse and Raiffeisen correct their inflation expectations. According to experts, it will take longer than expected for inflation to return to normal.
Inflation in Switzerland is at its highest level since 2008.
Credit Suisse is raising its inflation forecast for the current year. It is still assumed that inflation will fall below the 3 percent mark over the course of the year. However, it significantly raised its forecast from 2.3 to 2.9 percent. Raiffeisen also agrees with the substance. “Inflation is going to keep us busy for much longer than expected,” says Martin Neff, chief economist at Raiffeisen (61).
Inflation reached 3.4 percent in July, the highest level since 2008. The energy crisis in Europe, the dry Rhine River and supply chain problems have pushed up energy and commodity prices. Practically the entire economy is affected by the additional costs. For residents, inflation is noticeable at the gas pump, at additional costs and when shopping.
Seasonal effects and a strong franc
CS expects inflation to ease through seasonal effects in the fall. On the other hand, transportation costs, especially for air freight, should decrease again slightly after summer. On the other hand, expensive local fruits and vegetables are increasingly being replaced by cheaper imported products in the winter.
CS experts also anticipate a certain easing of supply bottlenecks in the fall and a consistently strong Swiss Franc. As a result, inflation should decline at least slightly in the fourth quarter.
The fact that CS is revising its inflation forecast for the year as a whole despite the expected fall in the fall has something to do with the summer we’ve now missed: Inflation has developed more aggressively during the summer months than experts predicted.
Unclear forecast for 2023
Opinions of experts differ widely on the outlook for the coming year. The only thing that is clear is that we are not going to get rid of inflation anytime soon. The only question is how high it is. Credit Suisse assumes that inflation will return to normal to 1 percent in 2023. However, this forecast is based on the assumption that the Swiss National Bank (SNB) will raise the key interest rate from -0.25 to +0.50%.
On the other hand, Martin Neff, chief economist at Raiffeisen, 61, says: “I expect inflation to remain at 3 before the decimal point in 2023.” Indicates a rise in energy prices. “With the current trend in electricity prices, electricity alone should account for one percentage point of inflation next year.”
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