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Why is Switzerland out of the inflation storm in Europe?

Prices of food and food items in Switzerland remained stable although countries in Europe are witnessing high prices, especially petrol.

Mr. Jean-Pierre Borboen – A resident of Rolle, Switzerland said: “Currently the price of gasoline has increased, but the price of food is still the same, I do not see myself being affected much.”

Hydroelectricity accounts for a large part of Switzerland’s electricity production, an advantage that makes the country less affected by high oil and gas prices like other countries. Energy makes up just 5% of the Swiss CPI basket, compared with 8% in the US and 10% in Germany, where consumers have been more affected by rising fossil fuel prices. .

In addition, the strong Swiss franc, which is near a seven-year high, on par with the euro – also helped a lot in imports, leading to domestic price stability.

Mr. Rudolf Minsch – Chief Economist, Business Organization Economiesuisse analyzed: “Oil prices are currently increasing at a dizzying rate, but why do they have a limited impact on the inflation rate of Switzerland. There are many for many reasons, firstly, we have a strong franc, which will make it less expensive to import oil, secondly, the high energy efficiency of the Swiss economy. Swiss people have high income, so they will not have to spend too much on energy, especially fossil energy.”

Why is Switzerland out of the inflation storm in Europe?  - Photo 1.

One of the reasons for low inflation in Switzerland is the fact that the cost of living in the country is already high. Switzerland has safeguards in place to combat high import prices and stabilize domestic prices, giving exporters the opportunity to gain an edge over foreign competitors.

“Switzerland is one of the countries with the strongest measures to protect the agricultural sector after Korea, Iceland, Norway and Japan. This drives food prices high. Our cost of living is high. , but we also have a valuable franc, we have to spend less on food imports, so consumers won’t see prices rise like in other countries,” said Rudolf Minsch.

Earlier this year, Switzerland also changed two laws to stabilize prices, the first is to strengthen competition laws to help prevent foreign businesses from imposing high prices on Switzerland; The second measure is to ban the geo-blocking system used by retailers to restrict online customers from buying cheaper products or services from foreign platforms by redirecting them to websites. of Switzerland.

With the distinctive features and price control policy of Switzerland, it is understandable why this country does not suffer from inflation like many other countries in the world.

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