Swiss price level again well above the EU average in 2023
Published: Tuesday, Dec 17th 2024, 15:00
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The price level in Switzerland remains significantly higher than in the EU. No EU country is more expensive than Switzerland.
Switzerland's purchasing power parity at gross domestic product level amounted to CHF 1.54 (EU27=1 euro) in 2023, while the price level was 158.4 points (EU27=100), as shown in the provisional breakdown published by the Federal Statistical Office (FSO) on Tuesday.
Last year, the Swiss had to pay 154 francs at last year's average exchange rate for a basket of goods that cost 100 euros on average in the 27 EU countries. This makes Switzerland almost 60 percent more expensive than the EU average.
Big differences
According to the FSO, the most expensive category compared to the EU (EU27=100 points) in 2023 was education, which costs almost three times as much in Switzerland as in the EU (274.7). The categories of healthcare (225.8) and housing, water, electricity, gas and other fuels (210.2) were also more than twice as expensive as the EU average.
The costs for communications (178.9), restaurants and hotels (172.3), food and non-alcoholic beverages (157.8) and other goods and services (183.1) were also significantly higher.
According to the report, the lowest value was recorded in the audiovisual, photographic and information processing equipment category (103.4). However, they are still slightly more expensive than the European average.
According to the FSO, this makes Switzerland the most expensive country in Europe in terms of price levels at gross domestic product level, followed by Iceland (148.7) and Denmark (132.3). The lowest price level was found in Turkey (44.0), behind North Macedonia (50.4) and Bosnia and Herzegovina (54.9).
Germany is in twelfth place with a price level of 111.9, followed by France (109.2). With a price level of 96.2, Italy is slightly cheaper than the average and thus in fourteenth place. The eurozone, which includes 19 countries, is slightly above the average of the 27 countries surveyed with a price level of 104.8.
Swiss currency also among the most expensive internationally
According to the so-called purchasing power parity theory, exchange rates between two countries should actually equalize in such a way that a comparable basket of goods can be purchased for the same amount. A Swiss person would therefore actually have to pay 1.54 francs for 1 euro in order to be able to buy the same amount in the eurozone, or in this case the same amount as in Switzerland. This also shows how attractive shopping tourism remains at the current exchange rate.
However, the theory mainly applies to goods or services that are easily tradable or comparable. The British business magazine "Economist" uses a Big Mac from McDonald's as a comparison. This is produced in the same way all over the world.
According to the latest edition of this Big Mac Index from 2024, the Swiss franc is almost 42% overvalued against the base currency, the US dollar, at an exchange rate of CHF 0.88 per dollar, while the euro (average eurozone) is 6.5% overvalued at USD 0.98 per euro. The purchasing power parity between the euro and the franc according to the Big Mac Index would therefore have been 1.27, compared to the exchange rate of 0.95 francs.
This makes the franc one of the most expensive currencies of all those that are normally convertible.
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