Higher wages and decreasing inflation are expected to boost the purchasing power of the Swiss population in the coming year. However, rising health insurance premiums could result in many households having less disposable income at the end of each month.

This is the conclusion drawn from the salary survey published on 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.

"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 to be 0.7% in 2025. As a result, wages are expected to increase by an average of 0.7% in real terms, Swiss Info reports.

Furthermore, according to UBS, employees in the IT and telecommunications sector, as well as those in the energy, utilities, and waste disposal sectors, can expect the highest wage increases, averaging around 2%. The chemical and pharmaceutical industry follows with an increase of 1.7%.

"However, a large part of the industry is likely to lag behind the average," said UBS economist Florian Germanier.

The media industry recorded the lowest wage growth, tying in last place with the building materials industry and retail trade, all with a rise of 1%. However, with the expected inflation of 0.7%, this still results in an increase in real wages and, consequently, an improvement in purchasing power.

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

Nevertheless, UBS economists expect that the projected 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."

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