As many countries across the globe battle sky-high inflation, Switzerland’s economy is seeing something far less dramatic.
Inflation in Switzerland hit a 29-year high of 3.5% in 2022. While high by Swiss standards, that figure is well below the double-digit inflation of comparable economies including the United States (9.1%), United Kingdom (11.1%) and euro zone (10.6%).
On top of that, economists say it’s easing.
“It’s coming down a little bit,” Tobias Straumann, professor of modern and economic history at the University of Zurich, told CNBC.
So, what is it about the Swiss economy that’s allowed it to largely sidestep inflation, and what can other countries learn from it? Watch the video to find out.
#CNBC #Inflation #Switzerland #Economy
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Countries around the world are grappling with the daunting challenge of containing inflation, as rising prices for goods and services put a strain on economies and hit pockets of ordinary citizens. However, amidst this global struggle, Switzerland seems to be bucking the trend. The nation has managed to keep inflation under control, offering a beacon of hope for others. So, what exactly sets Switzerland apart and enables it to combat inflation successfully?
One crucial factor contributing to Switzerland’s ability to contain inflation is its prudent monetary policies. The country has a well-established central bank, the Swiss National Bank (SNB), which operates independently. The SNB employs a proactive approach, ensuring stability in the financial markets and preventing any unwarranted surge in inflation. By skillfully managing interest rates, the SNB exerts control over the Swiss franc’s value and maintains price stability in the economy.
Another reason for Switzerland’s success in controlling inflation is its strong fiscal discipline. The Swiss government actively works towards maintaining a balanced budget and avoiding excessive public debt. Austerity measures are implemented when necessary, ensuring that public spending remains under control. This fiscal discipline allows the government to effectively manage inflationary pressures and prevents excessive government borrowing.
Additionally, Switzerland benefits from being an export-oriented economy, with a diverse range of sectors contributing to its economic growth. This diversity helps mitigate the impact of inflationary pressures within the domestic market. By relying on a strong export industry, Switzerland is not overly dependent on domestic consumer spending. Consequently, any potential rise in prices of imported goods and services does not have a severe impact on the overall economy and inflation remains relatively contained.
Furthermore, the Swiss economy benefits from a highly skilled labor force and a strong focus on innovation. This combination results in high productivity levels, allowing firms to maintain competitive prices while still delivering quality products. Increased productivity helps to alleviate inflationary pressures as it enables businesses to operate more efficiently and control costs effectively.
Switzerland’s success in containing inflation also stems from its transparent and open economic policies. The country is well-known for its commitment to free trade and has a stable regulatory framework that encourages foreign investment. This openness stimulates competition and maintains price levels within reasonable limits. Market forces are allowed to function, ensuring that the prices of goods and services are reasonable and sensitive to consumers’ needs.
It is worth mentioning that Switzerland’s advantageous geographical position plays a role in its ability to contain inflation. The country is surrounded by stable and prosperous neighbors, which provide a supportive economic environment. This stability translates into a low risk of imported inflationary pressures from neighboring countries, reinforcing Switzerland’s ability to keep inflation in check.
In conclusion, while countries worldwide are struggling with the challenge of containing inflation, Switzerland stands out as a shining example of success. Prudent monetary policies, fiscal discipline, a diverse export-oriented economy, a skilled labor force, openness to foreign investment, and a favorable geographical location all contribute to Switzerland’s ability to control inflation effectively. These factors collectively create a robust framework that enables the country to maintain price stability and protect the purchasing power of its citizens. Consequently, other nations can look to Switzerland as a source of inspiration and insights in their pursuit of containing inflation.
I need to move to this country.
THE. MEME. STOCK. IS. WEWORK. RISE. APES. RISE.
I'm favoured, $230K every 4weeks! My life has totally changed i can now afford anything and also support God's work around me and my society..
Prices are so high in Switzerland, how much higher can they go? Many Swiss who live in border villages drive to France, Germany, and Italy to do their shopping.
Switzerland's average median wealth means nothing, only a few hold the money, the rest starve or eat rotten food.
Bro they caused it, ask Davos
It's no questionable for a country that a home of banks.
A perfect storm is brewing in the United States. Inflation, bank collapse, severe drought in the agricultural belt, recession, food shortages, diesel fuel and heating oil shortages, baby formula shortages, available automobile shortages and prices, the price of living place. It's all coming together and it could lead to a real disaster towards the end of this year (or sooner). With inflation currently at about 6%, my primary concern is how to maximize my savings/retirement fund of about $300k which has been sitting duck since forever with zero to no gains.
In light of the ongoing global economic crisis, it is crucial for everyone to prioritize investing in diverse sources of income that are not reliant on the government. This includes exploring opportunities in stocks, gold, silver, and digital currencies. Despite the challenging economic situation, it remains a favorable time to consider these investments…
With markets tumbling, inflation soaring, the Fed imposing large interest-rate hike, while treasury yields are rising rapidly—which means more red ink for portfolios this quarter. How can I profit from the current volatile market, I'm still at a crossroads deciding if to liquidate my $275k bond/stock portfolio
"Great minds discuss ideas; average minds discuss events; small minds discuss people." – Eleanor Roosevelt
Very insightful
How about a plate of spaghetti costing 60 francs? Doesn’t that explain everything?
It surprises me why everybody gets really worked up about inflation and inflation data. Inflation has always existed, and people have been using investments to beat the inflation. The stock market return, for example, always beats inflation. I heard of someone who invested $121k last October, and has grown the portfolio by more than $400k. I need recommendations that can give me similar return.
I was waiting for her to bite on the Toblerone. She was only breaking a piece.
How about considering the possibility of negative inflation rates to increase the value of money? We could reduce wasteful spending and consumption, and instead adopt a more sustainable approach similar to nature's ecosystem, from an economic standpoint.
Come on can things get anymore expensive in Switzerland than they already are? They already charge $50+ for a small plate of food. When a nation is already as much of a rip off as Switzerland I don't think the prices can really go any higher regardless of inflation. They already live with outrageous inflated prices.
This is bullshit! Prices will be adjusted with time. Price rises are heavily regulated here so the question should be when?
Anyone see the price of real Swiss Cheese at grocery store?
Inflation has torn into global markets, with investors ripping up their forecasts for further rises in interest rates and dumping bank stocks around the world. I'm at a crossroads deciding if to liquidate my dipping 200k stock portfolio, what’s the best way to take advantage of this bear market?
When you raise the price of energy, you raise the price of everything. Energy is the fundamental cost of all goods and services.
BLAME the banks for inflation. Blame the federal reserve, the main cause of inflation.
that tolberone is so irritating
Pardon my ignorance about economy, but I’ve a question:
If they have such a strong currency, why can’t replace the dollar?
Of course. Rich because they Re not corrupt. They hVe c,lean hearts and clean place. People Re simple and hoext and contented. Hindi hungry for money katulad ng Pinas. The worst place is Pinas unless people start a new life.
Switzerland is not in the European Union or financing the Ukranian War, therefore are they better at making decisions for their citizens instead of their politicians.
I’d be awfully curious to see how the amount of money in circulation there has changed in the last few years.
Same narrative could be applied to Switzerland 1939-1945… honestly enough of neo-fascism being so “successful”
The financial system has been artificially pumped for over a decade to ensure big pockets were lined; and now those same hands will make a fortune in the largest transfer of wealth in human history by shorting it on the way down. Inflation does have a roll, but that's to keep everyone panicked, and focused on their bills and expenses, rather than focus on the capital crimes of politicians and corporations, I'm still at a crossroads deciding if to liquidate my $350k stock portfolio, what’s the best way to take advantage of this bear market??
notes:
solar panel: 5:10
“Inflation is always and everywhere a monetary phenomenon”; Milton Friedman said. This video is so bad that it didn’t considered money growth as a cause of inflation.
3:00 หลักเป็นที่พัก ทรัพย์สิน เวลาวิกฤต จะไม่เสื่อมค่าลง ค่าเงินเลยแข็ง
ประเทศอื่นค่าเงินอ่อน แต่กลับแข็ง
ค่าเวินแข็งนำเข้าสบาย คนอยู่สบาย
คนรวยอยู่แล้ว เลยไม่ต้องสนเรื่องส่งออก
ของส่งออกล้วนเป็นของมูลค่าสูงอยู่แล้ว
(จับตลาดบน สอนการสร้าง brand ให้เก่ง fashion & high tech)
สกุลเงินของตัวเองสำคัญ
4:00 ผลหระทบต่อปัจจัยภายนอกน้อย มีเขื่อนเพียงพอผลิตไฟฟ้าทั้งประเทศ (หลักพอเพียงสำคัญจริง ลดพึ่งต่างชาติ มีวิกฤตไม่กระทบ)
6:14 รัฐคุมราคา กระทบครองชีพเข็มงวด อาหาร ที่อยู่ ขนส่ง พลังงาน รัฐคุมหมด (คือวางแผนแล้วรับมือวิกฤตไว้แล้ว ราคาพลังงานเพิ่ม จาก usa จะต้องทำไง เดากระแสโลกออก เก็งกำไรมาแน่ นักการเงินเก่ง)(งั้นเศรษบกิจซบมาแน่ ดอลล่าแตก ดอลไหลออก ส่งออกไปเมกาซบ จีนอินเดียมา รอบริโภคเยอะ)
6:50 ส่งเสริมการซื้อสินค้าท้องถิ่นลดการนำเข้า (มีผลช่วงวิกฤตแบบลาวนำเข้าเยอะ70%)
8:00 ผู้คนยังเข้ามา อุปสงค์มีเสถียรภาพ คนรวยมาอยู่ ทรัพย์สินไม่เสื่อม ถ้า health ดีอีกหล่ะ สร้าง นักการเงินเก่งๆ และ healthcare
8:10 นโยบายการเงินลอกยาก จะแข็งดีต่อนำเข้า แต่ไม่ดีส่งออก แต่ switz ส่งแต่ add values
Before we stopped them, our advisor had us in over 60 assets. I'm now on my own to attempt and tidy up the mess. lost more than 25% over the previous three years. Huge national financial organization.Gregory Thomas Patchak has helped us become debt-free, save for retirement, and has helped transform my life. He has been amazing, and ever since I met him, my life has taken a positive turn because of the passive income through his knowledge and ideas, which are crucial for succeeding against all odds in this area of online commerce. I'm happy that I was able to contact him earlier this year.
The price of food in Switzerland was already astronomical. My Swiss acquaintances pay 10 US dollars for a gallon of milk and about 12 US dollars for a dozen eggs. Don't envy Switzerland until you understand how expensive Switzerland has always been. It is not easy to live there.
Hop Schwiiz!
The Swiss are great at laundering money!