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flag Switzerland Switzerland: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

Switzerland has a highly successful market-based economy. Its standard of living, its industrial productivity, the quality of its education system, and its health-care system are amongst the highest in Europe.
After several years of growth rate above the European average, the Swiss economy contracted sharply in 2009 (-1.9%) due to the international financial crisis and further slowed down in 2012 (0.8%) in the context of the eurozone crisis. After a solid 2% growth in 2013, a faster growth is predicted for 2014 (2.2% of the GDP), driven by domestic demand. With the gradual improvement of the global situation, foreign trade should again return to its dynamic performance.

Switzerland is a prosperous country with a budget surplus (1.1 billion EUR in 2013). The country's only disadvantages are its strengths: since the Swiss franc has become a safe haven for investors, have exports have become more expensive and therefore have decreased, which negatively affects growth. The government has adopted measures to preserve the country's attractiveness as a financial center, while at the same time being forced to abandon the notion of bank secrecy. The 2012-2015  growht package is aimed at improving the prosperity of Swiss households, increasing productivity, reforming healthcare and agriculture and modernize public services (cyberadministration, administrative streamlining and mid-term priorities in public spenidng). The 2014 budget, slightly in surplus, introduces administrative cuts (especially in the army) and counts on postponing road infrastructure projects. The long-term maintenance of the high Swiss per capita revenue nevertheless requires increasing productivity. An initiative against massive immigration was accepted in February 2014. The country has pledged to phase out nuclear power by 2034, and reduce per capita energy consumption by 35% per year as compared to levels in 2000.

Switzerland’s unemployment rate, estimated at 3.7%, remains very low compared to the EU average. The country has the fourth highest GDP per capita rate in the world.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 658.87631.18650.43679.03e680.11
GDP (Constant Prices, Annual % Change) 1.81.01.9e1.3e1.6
GDP per Capita (USD) 83,71979,34481e84,344e83,974
General Government Balance (in % of GDP) 0.30.60.40.81.1
General Government Gross Debt (in % of GDP) 49.1e49.2e48.347.2e46.4
Inflation Rate (%) 0.2-0.7-0.20.10.2
Unemployment Rate (% of the Labor Force) 2.82.93.23.43.3
Current Account (billions USD) 44.3470.43103.88e88.00e85.11
Current Account (in % of GDP) 6.711.216.0e13.012.5

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

Agriculture contributes around 1% to the GDP and employs 3% of the active population (only 10% of the land is suitable for cultivation). The primary agricultural products are livestock and dairy products. Swiss authorities grant numerous direct subsidies to farmers in order to meet strict ecological criteria such as soil protection. Organic farming is booming. There are hardly any mineral resources on Swiss soil. Agriculture is practiced on 40% of the territory, which also includes 9000 wineries.

Electricity is generated chiefly from hydraulic and nuclear power. Hydroelectric resources provide almost two-thirds of the country's energy. The strong industry sector is driven by large export groups. Switzerland is renowned worldwide for the high quality of its manufactured products, which include watches, motors, generators, turbines, and diverse high-technology products. Located in Basel, the chemical and pharmaceutical industry exports all over the world.

The service sector contributes to over 70% of the GDP and employs slightly under three quarters of the active workforce. The banking sector alone represents 8 % of the GDP. Well developed and globally competitive sectors such as banking, insurance, freight and transport, contribute substantially to the development of international trade across Switzerland. Tourism, which adds significantly to the economy, helps to balance Switzerland's trade deficit.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 3.5 20.3 72.5
Value Added (in % of GDP) 0.7 25.7 73.6
Value Added (Annual % Change) -2.2 -0.3 3.0

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Swiss Franc (CHF) - Average Annual Exchange Rate For 1 USD 1.091.040.890.940.93

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about Switzerland on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
81.6/100
Position:
Free
World Rank:
4/178
Regional Rank:
1/43

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
8.52
World Rank:
2/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Swiss economy is very much open to foreign trade, which represents more than 117% of the country’s GDP (2010-2012 average). The European Union (EU) is Switzerland's major trading partner, accounting for two-thirds of its total foreign trade. On 1st of June 2002, agreements were signed between the EU and Switzerland regarding seven main trade sectors. Exports account for approximately half of the country’s GDP. Switzerland's two main clients are the United States and the European Union.

Switzerland has a large trade surplus. Exports remained strong in 2012-2013 because the chemical/pharmaceutical sector is less dependent on the international economic situation than other sectors. In 2013, the trade surplus reached a record level of 24 billion CHF.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 155,378176,281208,220197,787200,478
Exports of Goods (million USD) 172,474195,609234,819225,949229,121
Imports of Services (million USD) 38,86736,28545,05746,73652,148
Exports of Services (million USD) 72,30981,18992,88388,89193,761
Imports of Goods and Services (Annual % Change) -3.88.19.2-2.813.5
Exports of Goods and Services (Annual % Change) -10.012.84.90.815.3
Imports of Goods and Services (in % of GDP) 49.953.557.356.760.0
Exports of Goods and Services (in % of GDP) 57.464.265.867.172.1
Trade Balance (million USD) 14,52531,39425,17035,98257,375
Trade Balance (Including Service) (million USD) 39,44854,42246,21853,63573,676
Foreign Trade (in % of GDP) 107.3117.8123.1123.7132.2

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
Germany 18.5%
United States 11.7%
Italy 7.1%
France 7.1%
United Kingdom 5.2%
See More Countries 50.5%
Main Suppliers
(% of Imports)
2013
Germany 28.1%
Italy 10.1%
France 8.3%
China 6.1%
United States 6.1%
See More Countries 41.2%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 14.1%
Human blood; animal blood prepared for therapeutic...Human blood; animal blood prepared for therapeutic, prophylactic or diagnostic uses; antisera and other blood fractions and modified immunological products, whether or not obtained by means of biotechnological processes; vaccines, toxins, cultures of micro-organisms (excl. yeasts) and similar products 10.4%
Wrist-watches, pocket-watches and other watches,...Wrist-watches, pocket-watches and other watches, incl. stop-watches (excl. of precious metal or of metal clad with precious metal) 6.0%
Articles of jewellery and parts thereof, of...Articles of jewellery and parts thereof, of precious metal or of metal clad with precious metal (excl. articles > 100 years old) 3.9%
Wrist-watches, pocket-watches and other watches,...Wrist-watches, pocket-watches and other watches, incl. stop-watches, with case of precious metal or of metal clad with precious metal (excl. with backs made of steel) 3.7%
See More Products 61.8%
- bn USD of products imported in 2013
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 7.6%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 5.1%
Articles of jewellery and parts thereof, of...Articles of jewellery and parts thereof, of precious metal or of metal clad with precious metal (excl. articles > 100 years old) 4.3%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 3.6%
Heterocyclic compounds with nitrogen hetero-atom[s...Heterocyclic compounds with nitrogen hetero-atom[s] only 3.3%
See More Products 76.0%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Federal Department of Economic Affairs
Federal Department of Finance
Federal Department of Environment, Transport, Energy and Communications
Federal Department of Home Affairs
DDPS Federal Department of Defence, Civil Protection and Sport
Federal Department of Justice and Police
Statistical Office
Federal Office for Statistics
Central Bank
Swiss National Bank (SNB)
Stock Exchange
Switzerland Stock Exchange
Search Engines
Search
Goldlinks
Lycos.ch
Reference
Regad
Sharelook.ch
Swissone
Yoodle
Economic Portals
EconomyWatch
SwissWorld

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Political Outline

Executive Power
President is both the chief of the state and head of the government. The post is purely ceremonial and by tradition rotates annually among the seven members of the Federal Council for one-year term. The Federal Council is a seven-member executive council (cabinet) that heads the executive branch, with its members being elected by country’s parliament for a four-year term. Under the constitution of Switzerland the make-up of the government is not determined by parliamentary majority but in accordance with a four-party power-sharing agreement (established in 1959) and known as the "magic formula".
Legislative Power
The legislature in Switzerland is bicameral. The parliament called Federal Assembly consists of: Council of States (the upper house) having 46 seats, with 2 members selected from each of the 20 cantons (states/provinces) and 1 from each of the six half-canton to serve four-year terms and the National Council (the lower house) having 200 seats, with its members elected by popular vote on the basis of proportional representation to serve four-year terms. The executive branch of government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. The federal legislative power is vested in both the government and the parliament.
Main Political Parties
Switzerland has a multi-party system, where a single party has little chance of gaining power alone. Thus, parties work with each other to form coalition governments. The major parties in the country are:

SVP (Swiss People's Party) – populist right-wing, with a strong base in German-speaking areas of Switzerland, SP (Social Democratic Party) – centre-left, CVP (Christian Democratic Party) - centre-right, Green Party - left-wing environmentalist, its motto "think globally, act locally."

Current Political Leaders
President: Didier BURKHALTER (since 1 January 2014)
Vice President: Simonetta SOMMARUGA (since 1 January 2014)
Next Election Dates
Presidential: December 2014 (conducted on yearly basis)
Council of States: Not available (each canton decides its own election dates)
National Council: October 2015
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
15/180
Evolution:
1 place down compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
1/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: October 2014