Two weeks ago, the Swiss National Bank stated that the inflation rate in Switzerland was a low 2.2%. This was the lowest inflation rate since the central bank started issuing an inflation target in December of 1999. The other day, the Bank of International Settlements published a report that stated that the inflation rate in Switzerland was a high 1.7%, which was the highest inflation rate in Western Europe, behind only the U.S. and Japan. Why are these two statements so different? The answer is simple: the BIS focus on the price of money, while the SNB focus on the price of goods. Both are important, of course, but they are very different.

Switzerland has had a difficult time in recent years. It is a small country that is highly developed in terms of its economy. It has the highest wages in Europe and the highest salaries in the world. However, it also has a highly developed welfare state and a high cost of living that has put a strain on the country’s finances. When the Swiss National Bank (SNB) was rumored to have raised interest rates—the first time in a decade—it caused shock waves to go through the country.

The headline of this post was prompted by a recent CNBC interview in which Swiss monetary policymaker Ignazio Visco was quoted as saying that the Swiss National Bank is “not worried about inflation.”  The comment, while meant to be tongue-in-cheek, is probably an accurate reflection of how the market perceives the situation in Geneva. So, what is the truth?. Read more about why is switzerland inflation rate low and let us know what you think.

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Inflation in Switzerland was negative in 2020 at -0.7%. This means that consumer prices will have fallen on average by 2020. This has made life cheaper in Switzerland.

But is life in Switzerland really cheaper? And if so, is it cheaper for everyone? Today I want to understand the inflation figures in Switzerland and what they mean. As we will see, inflation is not a perfect indicator of the cost of living in Switzerland.

In this article we will therefore have a closer look at inflation in Switzerland.

Inflation in Switzerland

Inflation in Switzerland is calculated by the Federal Statistical Office (FSO). They calculate the Swiss consumer price index (CPI) monthly. The index is a measure of the price of goods for the average consumer in Switzerland. In the next section we will see exactly how this is calculated.

It is important to go from one month to the next. This is called monthly inflation. And at the end of the year they also prepare an annual report on inflation.

The annual results for the last three years are as follows:

  • In 2018, inflation was 0.8%.
  • The inflation rate in 2019 was 0.4%.
  • In 2020, inflation was -0.7%.

These figures are very low compared to other countries. A negative number means that prices are falling. So we have to pay less. This may be associated with an increase in purchasing power when the cost of living falls.

And this is the story of inflation in Switzerland:

Historical inflation in Switzerland – 1960 – 2019

We note that inflation in Switzerland has been very reasonable since the late 1990s. Over the past decade, it has been essentially negative. Over the past 30 years, inflation has remained below 2%. It is interesting to note that the Swiss National Bank has an annual inflation target of 2%. So you’ve obviously done a good job.

The SNB has two main tools to act against inflation (or for inflation if it is negative):

  • fixing the interest rate for deposits by other banks with the SNB. For this reason, the interest rate is currently negative.
  • Purchases of foreign currency to influence the strength of the Swiss franc and to influence exports and imports.

So the reason why Switzerland has very low interest rates is that inflation was too low in the years after 2010. In 2015, the SNB decided to lower the interest rate to -0.75%, one of the lowest levels in the world. Since the SNB does not expect inflation to rise sharply in the coming years, interest rates are also likely to remain low for a long time.

Swiss consumer price index (CPI)

Inflation in Switzerland is calculated using the Swiss consumer price index (CPI). As mentioned above, the CPI is based on data for the average consumer. What does the average Swiss consumer consume? We need to monitor the composition of the CPI in detail. Fortunately, all of this is publicly available and well documented.

Here you can see the composition of the shopping basket for the year 2021 :

Official CPI basket of goods – measurement of inflation in Switzerland

For example, we see that the housing and energy category makes up the largest portion of the shopping basket, followed by the health and food category. The FSO calculates the average price for each of these categories and then uses the weights of the different categories to calculate the final inflation rate in Switzerland. For the CPI, this is done on a monthly basis.

The composition of the basket can be updated as the consumption patterns of the average household change.

If you want to know more about this index, you can find a lot of information on the website of the Federal Statistical Office.

Inflation problems in Switzerland

I think there are some problems with the measurement of inflation in Switzerland. Or to put it another way: I think we need to be careful about inflation and the cost of living. I believe that inflation is measured correctly in Switzerland, but we must be careful about the conclusions we draw from these measurements.

To me, the biggest problem is the lack of health insurance premiums in the basket. Health insurance is an important item in the Swiss household budget. For many families, this may be the biggest expense budget-wise. We will look at this in more detail in the next chapter.

The other problem is that this is an average of over the entirepopulation. For many people, this is a very bad sign for their cost of living. Of course, we cannot have an index for every person in Switzerland. That would be impossible. But we need to have indices for different classes of households:

  • Singles
  • Couples without children
  • Couples with children
  • Single parent with children

This would really help people understand inflation and relate it to the cost of living in Switzerland. So while inflation in Switzerland is low for the average household, it can be higher for certain types of households.

Another, less important, problem is that the is average across the country. I think we should have regional indexes for every municipality in the country. Unfortunately, only three cantons currently provide regional inflation rates: Zurich, Basel and Geneva. I don’t think that’s a problem, because there’s usually not much difference in inflation between the cantons. But even these measures wouldn’t hurt.

Health insurance and inflation

As already mentioned, health insurance premiums in Switzerland are not included in inflation. Since health insurance is terribly expensive in Switzerland, it would be very useful if the CPI also included health insurance premiums.

The reason they don’t take it into account is because they consider it a transfer. You pay money to an insurance company, which then pays for your medical care. The CPI is based on this definition. But health care cost inflation is not directly related to health insurance premium inflation. Because most people have high deductibles, health care costs also affect costs other than health insurance premiums.

Essentially, the problem is that health insurance premiums are rising very quickly. Since 1996, prices have increased by an average of 3.8% per year. Since 1996, prices have increased by a total of + That’s just crazy. Switzerland has one of the most expensive health care systems in the world. For households with insurance, health insurance premiums account for between 10 and 20% of costs. It is therefore necessary to take account of this in the inflation rate. From

The Federal Statistical Office has acknowledged this problem. Since 2000, they have published a second index, the Health Insurance Premium Index (HIPI). Unfortunately, it is not as well documented as the CPI. Moreover, it is independent of the CPI. I want an adjusted CPI that includes health insurance premiums. I have been unable to find historical values for this index. But it must follow the changes in health insurance premiums already mentioned.

The lesson is to be aware that the measurement of inflation in Switzerland does not includehealth insurance premiums. Therefore, inflation for individuals is likely to be higher than reflected in the CPI. Inflation is not a perfect measure of the cost of living in Switzerland.

Personal inflation

Your personal inflation is the inflation based on your own basket of goods. In most cases, the basket will differ from the shopping basket of the average household. For example, if you don’t drink or smoke, you can remove an entire category from your cart. Or, if you are very frugal with your products, they may be a much smaller part of your budget.

If you want to know your personal inflation, you have two choices:

  • You can view all your expenses and follow their evolution over time. However, you need to have a good record of your expenses over several years to see what your expenses are.
  • You can use the Federal Statistical Office’s individual inflation calculator.

For us, looking at our expenses is not a good representation. We continue to strive to improve our costs. Besides, everything changes with the arrival of the house. As a result, our spending is not stable enough to accurately measure personal inflation. For example, our current average is lower than that of 2019, but significantly higher than that of 2015.

The FSO calculator is an excellent tool for studying inflation in Switzerland using your own basket. If you know roughly how much you spend on each category of baskets, you can get a good idea of your personal inflation rate.

For example, these are the results for our own household:

Our personal inflation rate

It is very interesting to note that our personal inflation is much higher than the average inflation per household in Switzerland! Since 2010, the goods we consume have increased by 1.2%, while for the average household they have decreased by 1.2%.

This is a good example! This shows that household inflation can differ significantly from the average. Looking at the figures, high inflation seems to be related to several factors:

  • We don’t spend much on communications, the price of which has dropped.
  • We don’t spend much on transportation, that has also become cheaper.
  • We also spend little on leisure and culture

On the other hand, there are a number of things that bring our inflation down:

  • We spend almost no money on alcohol and we spend no money on tobacco. Both have become more expensive.
  • We don’t spend much on food, which has also become more expensive.
  • We are not spending enough on health care, which has become very expensive.

Overall, I find these results fascinating. We seem to be an atypical family. When we spend less on goods that become cheaper, the effect of inflation on our budget increases.


Inflation in Switzerland has been low for the past 20 years. This means that commodity prices have not increased much. This should be good for consumers.

On the other hand, it is important to note that some items are not included in the official inflation index. For example. B. very expensive Health insurance premiums not included.

Something else that is included in the cost of living, but not in inflation, is taxes. For us, this is the most important item in our budget. So if they develop, it will have a big impact on us.

In addition, inflation is calculated based on the average for the entire Swiss population. And the households are very different. Official inflation in Switzerland should therefore be taken with a grain of salt.

If you are interested in your own inflation, you should consult the individual ESF calculator. For us, our personal inflation is much higher than the average Swiss inflation.

If you are worried about inflation, I have an article on what you can do about it.

What is your individual inflation rate? Are you worried about inflation in Switzerland?

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Sir, I want to thank you for your support. Poor Swiss is the author of In 2017, he realized he was caught up in lifestyle inflation. He decided to reduce his expenses and increase his income. This blog tells his story and his conclusions. In 2019, he set aside more than 50% of his income. His goal is to become financially independent. Here you can send a message to Mr. Send Bad Swiss.Does it seem like inflation in Switzerland is low? Maybe you’re right, and maybe it’s not. The real question facing Switzerland is whether the current low inflation can continue. Can inflation remain low for years to come? The current low inflation in Switzerland is a result of a variety of factors, including:. Read more about inflation u.s. may 2021 and let us know what you think.

Frequently Asked Questions

Does Switzerland have a good inflation rate?

Switzerland has a low inflation rate.

What is the inflation rate in Switzerland?

The inflation rate in Switzerland is 2.2%.

Is inflation increasing or decreasing?

Inflation is increasing.

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