Inflation in Switzerland – what you need to know

Switzerland is considered to be economically stable. Nevertheless, it is not immune to inflation. What’s behind inflation and how do you protect your assets?

If you go shopping in Switzerland today, you’ll quickly notice: Prices are going up. Even supposedly secure savings gradually lose value. In this article, you’ll find out the most important facts about inflation in Switzerland – and what you can do specifically.

What is inflation?

Inflation means that money loses purchasing power. As a result, a given amount of money – for example, CHF 100 – buys fewer and fewer goods or services over time. In other words, the cost of living is rising.

How is inflation measured?

In order to measure inflation in Switzerland, the Federal Statistical Office regularly calculates the rate of inflation using the national consumer price index (Landesindex der Konsumentenpreise, LIK). The LIK is based on a shopping basket of typical Swiss household expenses (e.g. housing, energy, food, transportation, etc.). Health insurance premiums, taxes, and social insurance contributions are not included in the LIK.

How high will Swiss inflation be in 2026?

According to the inflation forecast for Switzerland, the SNB expects an average inflation rate of 0.5% for 2026 as a whole. Over the past 20 years, the inflation rate in Switzerland has averaged between 1 and 1.2% per year (annual inflation). Following a peak of around 3.5% in summer 2022, current inflation in Switzerland has fallen steadily since then. The Swiss National Bank (SNB) is actively working to keep inflation between 0 and 2%. To do this, it uses the key interest rate and manages exchange rates.

What fuels inflation?

A major driver of inflation is the principle of supply and demand: When global supply routes are disrupted or production stagnates, there are fewer goods on the market. When this limited supply meets steady demand, prices automatically rise – you end up paying more for the same product. Geopolitical crises and conflicts make transport routes less secure and, above all, increase the price of energy and raw materials, affecting many other goods along the value chain.

What are the long-term consequences of inflation?

Constant inflation reduces the real value of your assets over time. With moderate inflation in Switzerland of 2% over 10 years, purchasing power drops from CHF 100 to just around CHF 82. If you leave your money in a bank account without interest, you lose almost a fifth of your assets in real terms. And if the bank pays interest on your savings account, it will probably be completely eaten up by the bank charges incurred. In other words, at the end of these 10 years, there is an actual loss in value of just under 18 to 20% despite the same nominal account balance.

What can I do to keep inflation from eating away at my money?

Investing in tangible assets such as equities, real estate, or precious metals is a proven strategy against the gradual loss of value. Experience has shown that these are better able to keep pace with inflation than pure cash. Those who invest broadly in the stock market – for example via low-cost ETFs – participate directly in the economic power of companies that are often able to pass on rising costs to customers. So investing remains one of the best ways to preserve and grow your assets in times of inflation. You can get started even without any previous knowledge: Our blog post Investing for beginners shows how.

What are the advantages of investing my pension capital?

If you want to retain purchasing power and secure your financial future, you should invest your pension capital in Pillar 3a and/or 3b. And for good reason, because experience has shown that pension assets invested over the long term increase exponentially over the years – despite inflation. Benefit from this effect with AXA’s SmartFlex pension solutions.

What is SmartFlex?

Under the SmartFlex label, AXA offers three different pension products, that combine safety capital with return-oriented capital. You yourself determine how much of your capital goes into which asset class. The amount paid in and the chosen investment strategy can be adjusted during the term. Depending on your needs, you can focus on Saving, Investing or predictable income in retirement with SmartFlex.

With SmartFlex, you invest in a targeted way in the investments that correspond with your personal convictions: “Sustainability,” “Switzerland,” “Future Trends,” “Global” – and now “Dividends.” With this investment theme, you focus your investments on companies with stable and attractive distributions. You also benefit from 3b tax privileges with AXA (see infobox).

Summary: It’s worth investing – including in Switzerland 

In Switzerland, we are benefiting from mechanisms that dampen inflation. As a result, the rate of inflation is often lower than in our neighboring countries. Nevertheless, capital tends to shrink here too – at least if it’s in a savings account or under the mattress. 
So it makes sense to let your money work for you. Not sure which solution is right for you? We’ll be glad to advise you.