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Specter of Inflation - Big Spreads in Profit Margins - News

Specter of Inflation – Big Spreads in Profit Margins – News


Household appliances, clothing, groceries, toys: Since the beginning of the year, everyday goods have become more and more expensive. Also in Switzerland. Inflation rose to 2.5 percent in April. Inflation in Switzerland has not been this high since the financial crisis.

In 2008, Switzerland’s inflation rate reached 3% for the last time. After that I just got off. Even many goods and services have become cheaper in Switzerland in recent years. The trend reversal came a year ago. Since then the prices have been on the rise. The Federal Statistical Office has published the latest inflation figures.

In April, the cost of the shopping cart was 2.5% higher than it was a year ago. Inflation in Switzerland is mainly driven by those goods that must be imported. Imports are 6.6 percent more expensive than a year ago. For those goods that are produced domestically, the inflation rate is only 1.2 percent.

25 percent more for batteries

Almost everything in the country is affected by high prices. However, the additional fees are different. According to a survey of retailers conducted by business news agency AWP, prices of electronic devices, for example, have risen by a single digit since the beginning of the year. Coffee beans cost 10 percent more, textiles 15 percent more expensive, and batteries cost 25 percent more over the counter, just to name a few.

Thus, the 2.5 percent inflation rate is just a statistical variable. How individually consumers are affected by inflation depends on the specific goods and services they need. But is the 2.5 percent statistical inflation too much or too little?

The National Bank is not working yet

When measured against the Swiss National Bank (SNB) target, it’s too much. The Swiss National Bank wants to keep prices as stable as possible and therefore aims to control less than 2%. Despite this, it has done nothing so far to curb inflation.

This is also related to the fact that inflation in Switzerland is still much lower than in the Eurozone or in the US. Inflation rates there are 7.5 percent and 8.5 percent, respectively. One of the reasons for the sharp rise in prices in Switzerland so far is our currency. The franc strengthened against other currencies, which made our imports cheaper.