In May, rental prices in Switzerland increased by 1 percent compared to April and 3.4 percent compared to the same month last year, according to the Federal Statistical Office. The overall inflation rate remained constant at 1.4 percent compared to May of the previous year, but this was due in part to a decline in other prices. Apartment rents made up a significant portion of this price index, at 15 percent.
Rental prices were included in the inflation data for the first time since February in May, reflecting changes that occurred after December when the reference interest rate for tenancies was raised. This led to an increase in rents for 19 percent of new tenancies. However, it is unclear how much impact this will have on inflation as rental costs are only included once every quarter by the Federal Statistical Office.
The uncertainty surrounding monetary policy is further compounded by fluctuations in the value of the Swiss franc against other currencies, particularly the euro. While this strengthens domestic exporters, it also increases the risk of imported inflation if goods become more expensive due to exchange rate fluctuations or supply chain disruptions caused by global economic instability. So far, imported goods have continued to decrease in price, contributing to inflation driven by domestic goods and services.
