Purchasing power Real wages in Switzerland likely to rise in 2025 according to UBS

Higher wages and falling inflation are likely to increase the purchasing power of the Swiss population in the coming year. However, in view of rising health insurance premiums, many households could still have less in their wallets at the end of the month.

This is the conclusion of the salary survey published on Thursday by the Chief Investment Office of UBS Global Wealth Management (UBS CIO GWM). According to the survey, the 345 Swiss companies surveyed by UBS are planning salary increases of 1.4 percent on average in 2025.

"Although this means that wage growth will slow slightly, real wages are likely to increase for the second time due to the expected decline in inflation," said UBS Chief Economist Daniel Kalt at a media conference. UBS is forecasting inflation of 0.7 percent for 2025. On average, wages are therefore likely to rise by 0.7 percent in real terms.

Wage increase broadly based

According to UBS, employees in the IT and telecommunications sector as well as the energy, utilities and waste disposal sector can expect the highest wage increases of around 2 percent. The chemical and pharmaceutical industry follows with 1.7 percent. "However, a large part of the industry is likely to lag behind the average," explained UBS economist Florian Germanier.

The media industry recorded the lowest wage growth, sharing last place with the building materials industry and retail trade with a rise of 1 percent. But here too, the expected inflation of 0.7 percent means an increase in real wages and therefore purchasing power.

Less in the wallet

However, this does not take into account health insurance premiums, which have been rising sharply for years. "Many Swiss households are therefore likely to feel a decline in purchasing power," continues Germanier.

Nevertheless, the UBS economists assume that the forecast real wage increases will support consumption in the coming year, "even if rising health insurance premiums and the moderate increase in unemployment limit the potential".

Rising wages are also unlikely to trigger any inflationary pressure: "Due to falling electricity prices and the expected decline in the reference interest rate, inflation should continue to fall in 2025," said chief economist Kalt.

SDA