cost of living For Members

EXPLAINED: The groups most affected by inflation in Switzerland

Helena Bachmann in Geneva
Helena Bachmann in Geneva - [email protected] • 29 Aug, 2022 Updated Mon 29 Aug 2022 15:35 CEST
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The more you use your car, the more affected you'll be by inflation. Photo: Pixabay

An increasing number of people in Switzerland are feeling the effects of the rising cost of living, as prices for many goods continue to soar.

The inflation rate in Switzerland - 3.4 percent - is currently significantly lower than elsewhere in Europe, which has average inflation of 8.9 percent across the eurozone countries.

Reasons for this include a strong Swiss currency (when compared with the euro), as well as less reliance on Russian energy sources. Data from the International Energy Agency shows that less than 1 percent of the electricity consumed in Switzerland comes from oil and natural gas, while 58 percent originates from renewable sources or nuclear power.

“By comparison, in the European Union, over one-fifth of the electricity is produced with natural gas and over one eighth with coal”, the banks’ analysts found.

READ MORE: EXPLAINED: Why Switzerland’s inflation rate has stayed low compared to elsewhere

However, even this relatively low inflation has impacted on prices for everyday items and bills.

Figures from the Federal Statistical Office indicate that, in a span of one year, the price of fuel oil has gone up by 76 percent and that of gas by 56 percent.

In addition, health insurance premiums are also likely to rise in 2023, up to 10 percent more, according to projections.

However, "the inflation felt by consumers in Switzerland is much higher than that shown in official figures", according to a report by RTS public broadcaster. "And if these increases have not yet affected most people, it is only a matter of time” before they will.

Who is most vulnerable to inflation?

Unsurprisingly low-income households suffer the most.

But a recent study by Comparis consumer service and KOF Economic Centre shows that couples under 65 years of age without children represent the category for which inflation has been felt the most, with higher fuel prices particularly affecting motorists.

On the other hand, single pensioners — people aged 65 and over living alone — “feel the cost of inflation the least in their daily lives”, the study found. That may be because they don’t have to commute to work so are less impacted by fuel price rises.

As far as regions are concerned, Ticino feels the crunch more than other canons.

The reason: "It is where the density of individual cars is the highest", the study reported.

What’s next?

Beyond the current trends, it is difficult to accurately predict whether more households and individuals will be in a precarious financial position if the current situation deteriorates.

The hope is it will not become as dire as it was during the first wave of the coronavirus pandemic in the spring of 2020, when thousands of people used to queue up each Saturday in Geneva for free food.

READ MORE : Coronavirus crisis lays bare poverty in Geneva as thousands queue for food

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Helena Bachmann in Geneva 2022/08/29 15:35

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