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Anyone who has shopped in Germany lately knows that the price gap with Switzerland has narrowed somewhat. It is true that most of the consumer goods are still cheaper with its northern neighbor. However, inflation is significantly higher than in Switzerland. In February, consumer prices increased by 8.7 percent on average compared to the same month of the previous year; It was even clearer with food at 22 percent. Compared to Switzerland, which has a mini-inflation of less than 3 percent, the price gap should close.
But this is not the case everywhere. Take furniture, for example: the Kivik Tibbleby sofa bed in Ikea Germany costs 349 euros, but according to the “20 minutes” records, it is 799 francs in Switzerland. Considering the fact that the euro and franc are now roughly equivalent, the price gap with Switzerland is a huge 129 percent.
Ikea explains to the newspaper that about half of Ikea products in Switzerland are as expensive or even cheaper than in Germany. For the other half, the average price difference is 20 percent. Ikea justifies this by saying that you can buy on better terms for the larger German market and, for example, logistics and salary costs are lower.
Slightly higher purchasing power, much higher prices
A look at the online site of accessories company Claire’s reveals something similar. Switzerland has to pay 27 francs for the Club Sherpa penguin backpack, while the same backpack costs 15 euros in the eurozone. So almost half. Gold-rimmed lab diamond earrings cost 99.99 euros in the eurozone and 169.90 francs in Switzerland.
Sure: Switzerland has higher wages and a lower tax burden, so higher consumption costs are understandable. However, price differences of 100 percent and above are negligible. Nor is it a case where Switzerland can easily afford the inflated prices. Our purchasing power is only 13 percent higher than our German neighbors, according to the latest OECD index.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
