Switzerland’s consumer price index (CPI) fell by 0.1% in January 2025. Across 12 months inflation was +0.4%, reported the Federal Statistical Office (FSO). Annual inflation at the end of January 2025 is the lowest it has been since April 2021 when it was +0.3%.
While many nations, such as the UK and the US, are struggling to rein in inflation, Switzerland is going against the grain.
In the US annual inflation rose to 3% at the end of January 2025 and in the UK it reached 3.9%, the highest it has been in 10 months.
Even in Japan, where inflation has long been largely absent, prices are rising. Inflation data released on Friday showed core prices in Japan were up 3.2% across the last 12 months.
After climbing to a peak of 3.5% in August 2022, Swiss inflation has followed a bumpy path down to 0.4%. With the Swiss National Bank’s policy interest rate at 0.5% and the yield on government bonds at 0.577% real interest rates are currently positive.
Switzerland’s strong currency, driven in part by a positive trade balance, is one force helping to dampen inflation. A positive trade balance means more buying than selling of a nation’s currency.
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