Economic trends
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. With a growth estimated at 2.7% of the GDP in 2010, the recovery was quick and vigorous, driven by the global recovery, as well as by the quick improvement of domestic demand. But the results were overshadowed in 2011, due to the appreciation of the Swiss franc against the euro (currency of its major trading partners) that has hit Swiss exports and the downturn in U.S. demand.
In 2011, the government pursued its stabilization measures, which concern, among others, supporting employment and promoting exports. In order to comply with the rule of limiting debt, the authorities adopted fiscal consolidation measures on the federal level. Special attention have been paid to inflationary pressures. However, the economic outlook for Switzerland has deteriorated in recent months: the crisis of the euro has hit the market and affected the economic dynamics of European countries, the main partners of the Swiss confederation. As a result, growth prospects in Switzerland for 2012 were reduced from 2% to 0.9%.
Switzerland’s unemployment rate, estimated at 3.4% in 2011, remains very low compared to the EU average. However, the decline in economic conditions should result in higher unemployment in 2012, which has not happened since 2009.
Main branches 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.
Electricity is generated chiefly from hydraulic and nuclear power. 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. 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.
International trade
Swiss economy is very much open to foreign trade, which represents more than 90% of the country’s GDP. The European Union (EU) is Switzerland's major trade 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 of are the United States and the European Union. Switzerland shows a substantial trade surplus.
As a result of the crisis of the euro that began at the end of 2011 and the fall in U.S. demand, we can expect a near stagnation of Swiss exports in 2012, which should increase by only 1% by volume.
© Export Entreprises SA, all rights reserved.
Last updates:
