Nr. 161, April
Inflation picks up significantly worldwide but remains moderate in Switzerland
- KOF
- Energy
- Inflation
- KOF Bulletin
Prices in the euro area and especially in the United States have risen sharply recently. Inflation momentum has also picked up in Switzerland. However, KOF expects the upward trend in prices in Switzerland to weaken towards the end of the year.
Companies expect to see falling real wages and higher inflation in the long term owing to the war in Ukraine
- KOF
- Inflation
- KOF Bulletin
- Surveys
Russia’s invasion of Ukraine has lowered Swiss companies’ expected wage growth and, at the same time, raised their inflation forecasts. Small and medium-sized enterprises in particular, as well as companies in the manufacturing sector, expect to see higher prices in the long run. In purely arithmetical terms, the information provided by these firms translates into negative real wage forecasts, which are even more negative than they were before the war in Ukraine.
Monetary policy: rising inflation puts central banks under pressure to act
- KOF
- Monetary Policy
- Inflation
- KOF Bulletin
The continuing rise in prices is forcing the central banks in the United States and Europe to reconsider their highly expansionary monetary policies. The Swiss National Bank will probably only reverse its policy stance once central bankers in the euro area have implemented their first interest-rate hike.
KOF business situation suffers a setback
- KOF
- Swiss Economy
- KOF Business Situation Indicator
- KOF Bulletin
The business fortunes of companies in Switzerland deteriorated significantly in March, with the financial and insurance services sectors primarily responsible for the less encouraging situation (see Chart G 9). The changes in the other sectors of the economy in March were comparatively small.
Poorer households particularly affected by rising healthcare costs
- Inflation
- KOF Bulletin
- Health care
Directly paid healthcare costs in Switzerland decrease as a share of income as income increases, whereas in other countries it is typically the other way round. This is due not to rising healthcare costs but to the way healthcare expenditure is funded.
“Central banks are powerless to prevent supply shortages”
- Monetary Policy
- World Economy
- Inflation
- KOF Bulletin
KOF Director Jan-Egbert Sturm talks in an interview about the latest price increases in almost all currency areas, central banks’ potential counter-strategies and why inflation in Switzerland remains moderate.