Wage growth and declining inflation are likely to increase the purchasing power of the Swiss population in the coming year. However, rising health insurance premiums could leave many families with less money at the end of each month.
This is the conclusion of a salary survey published Thursday by the Chief Investment Office of UBS Global Wealth Management (UBS CIO GWM). According to the survey, 345 Swiss companies surveyed by UBS plan to increase wages by an average of 1.4% in 2025, reports albinfo.ch.
“Although this means wage growth will slow down slightly, real wages are likely to rise for the second time due to the expected decrease in inflation,” said UBS Chief Economist Daniel Kalt in a media conference. UBS forecasts inflation of 0.7% for 2025. On average, wages are expected to increase by 0.7% in real terms.
Broad-Based Wage Growth
According to UBS, employees in the IT and telecommunications sectors, as well as in energy, utilities, and waste management, can expect the highest wage increases of around 2%. The chemical and pharmaceutical industries follow with 1.7%. “However, a large part of the industry is likely to fall behind the average,” explained UBS economist Florian Germanier.
The media industry recorded the lowest wage growth, sharing the bottom spot with the construction materials industry and retail, with an increase of 1%. But even here, the expected inflation of 0.7% means real wage growth, and thus an increase in purchasing power.
Less in the Wallet
However, this does not take into account health insurance premiums, which have risen significantly in recent years. “Many Swiss families are likely to feel a decrease in their purchasing power,” Germanier continued.
However, UBS economists assume that the forecasted growth in real wages will support consumption next year, “even if the increase in health insurance premiums and the moderate rise in unemployment limit potential.”
Wage growth is also unlikely to cause inflationary pressure: “Due to the decline in electricity prices and the expected decrease in the reference interest rate, inflation should continue to fall in 2025,” said Chief Economist Kalt.
