The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
This Selected Issues paper takes a close look at the proximate determinants and short-term dynamics of inflation in Switzerland. It identifies salient features of the inflation experience in Switzerland. The paper uses a wage-price model to gauge the sensitivity of inflation to the business cycle and the exchange rate. The findings suggest that underlying inflation of about 1 percent reflects a slightly higher rate for domestic goods and services and low increases in prices of imported goods.