With the country set to avoid a recession, and the franc going from strength to strength, things seem to be looking bright for the Swiss economy. Now, the latest data from the Federal Statistical Office (FSO) has revealed that inflation in Switzerland fell to 1,7 percent at the end of June 2023 - returning to levels unseen since the start of the war in Ukraine.

Inflation in Switzerland falls to pre-Ukraine war levels

According to the FSO, reported in Watson, annual inflation in Switzerland fell from 2,2 percent in May to 1,7 percent in June 2023. This marks the first time that annual inflation has fallen below the 2 percent mark since January 2022.

The current rate of inflation is a huge climbdown compared to the start of the year, when annual inflation stood at a near-record 3,4 percent - at the time, the FSO blamed the phenomenon on the higher cost of flying and the soaring cost of energy. Despite an inauspicious start, inflation has fallen precipitously since the start of the year thanks to a decline in the cost of fruit, air transport and fuel, the FSO explained.

Price rises slowing for people in Switzerland

However, when it comes to consumers, many families and individuals in Switzerland will still be counting the rappen (centime) - although it is hoped that the lower inflation rate and the higher value of the Swiss franc will allow salaries to catch up to high prices, something they have been unable to do up to this point. The national consumer price index increased slightly to 106,3 points in June 2023, with the FSO noting that local products like cheese, watches, fruits and vegetables are now an average of 2,3 percent more expensive than they were the year before.

The most recent rise in the index was blamed on a number of factors including the higher price of food, with costs rising by 5,1 percent compared to costs in June 2022. The cost of activities and staying at Swiss hotels have also increased by 3,7 and 3,3 percent a year respectively.

On the flip side, the cost of some products has actually started to fall, with the wholesale price of fuel now being 22,6 percent cheaper compared to June 2022. Prices for mobile phones, phone lines and internet (-3,3 percent), and transportation (-3,3 percent) have also fallen compared to the same time last year.

For more information, check out the official report (in German).

Thumb image credit: Sorbis / Shutterstock.com