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Encyclopedia > Economy of Switzerland
Economy of Switzerland
Currency Swiss Franc (CHF)
Fiscal year Calendar year
Trade Organisations OECD, WTO, EFTA, JEC
Statistics
GDP Ranking (2007) 36th [1]
GDP (2006) CHF486.2, $371.5 billion [2]
GDP growth rate (2006) 4.9% nominal, 3.2% real
GDP per Capita (Q2 '04 annualised) $33,800
GDP by sector (2004) agriculture (1.5%), industry (34.0%), services (64.5%)
Inflation rate (Q1 2006) 1.4%
Pop below poverty line (2005) 3.3%[3]
Labour force (June 2004) 3.8mio [4]
Labour force by occupation (2002) agriculture (4.6%), industry (26.3%), services (69.1%)
Unemployment rate (2007 est) 2.5%
Main Industries machinery, chemicals, watches, textiles, precision instruments
Trading Partners
Exports $130.7 billion (2004 est)
Main Partners (2004 est) Germany 20%, US 9.1%, France 9.1%, Italy 8.8%, UK 4.9%
Imports $121.1 billion (2004 est)
Main Partners (2004 est) Germany 29%, Italy 11.8%, France 11.1%, US 7.6%, Austria 4.5%, UK 4.5%, Netherlands 4.3%
Public Finances
Public Debt (2005) 57.2% of GDP
External Debt (2005 est) $NA
Revenues (2004) $131.5 billion
Expenses (2004) $140.4 billion
Economic Aid (ODA) (1997) $1.1 billion

The economy of Switzerland is one of the world's most stable economies. Its policy of long-term monetary security and bank secrecy has made Switzerland a safe haven for investors, creating an economy that is increasingly dependent on a steady tide of foreign investment. Because of the country's small size and high labour specialisation, industry and trade are the keys to Switzerland's economic livelihood. Image File history File links Question_book-3. ... ISO 4217 Code CHF User(s) Switzerland, Liechtenstein, Campione dItalia Inflation 1. ... The Organization for Economic Co-operation and Development (OECD) is an international organization of those developed countries that accept the principles of representative democracy and a free market economy. ... For other uses of the initials WTO, see WTO (disambiguation). ... The European Free Trade Association (EFTA) was established on May 3, 1960 as an alternative for European states that were not allowed or did not wish to join the European Community (now the European Union). ... One thousand million (1,000,000,000) is the natural number following 999,999,999 and preceding 1,000,000,001. ... Map of countries showing percentage of population who have an income below the national poverty line The poverty line is the level of income below which one cannot afford to purchase all the resources one requires to live. ... CIA figures for world unemployment rates, 2006 Unemployment is the state in which a person is without work, available to work, and is currently seeking work. ... For other uses of terms redirecting here, see US (disambiguation), USA (disambiguation), and United States (disambiguation) Motto In God We Trust(since 1956) (From Many, One; Latin, traditional) Anthem The Star-Spangled Banner Capital Washington, D.C. Largest city New York City National language English (de facto)1 Demonym American... For other uses of terms redirecting here, see US (disambiguation), USA (disambiguation), and United States (disambiguation) Motto In God We Trust(since 1956) (From Many, One; Latin, traditional) Anthem The Star-Spangled Banner Capital Washington, D.C. Largest city New York City National language English (de facto)1 Demonym American... It has been suggested that this article or section be merged into Development aid. ... Investment is a term with several closely-related meanings in finance and economics. ...

Contents

History

For much of the 20th century Switzerland was the wealthiest country in Europe by a considerable margin. However, during World War I Switzerland suffered an economic crisis and so the war tax was introduced. As Imports were difficult, attempts were made to strengthen the Swiss economy. The cultivation of grain was promoted, and the Swiss railway became the first to use electric instead of coal-burning, steam-driven engines. During World War II the economy profited from the increased export and delivery of weapons to the German Reich. The conduct of the banks cooperating with the Nazis by commercial relations during the war became the subject of sharp criticism. After World War II, Switzerland's production facilities remained to a great extent undamaged which facilitated the country's swift economic resurgence. In the 1950s, annual GDP growth averaged 8%. In the 1960s, annual GDP growth averaged 5%. After 1970 annual GDP growth rates gradually declined until contracting 7.5% in 1975 and 1976. GDP grew until 1982 when the economy contracted by 1.3%. GDP grew until plummeting in a 3-year-recession from 1991 to 1993 when the economy contracted by 2%. After having an unemployment lower than 1% until 1990 the 3-year-recession also caused the unemployment rate to rise to its all-time-peak of 5.3% in 1997. The 1990s have been marred by slow growth, and so as of 2005 it dropped to fourth place among European states with populations above one million in terms of nominal Gross Domestic Product per capita, behind Ireland, Denmark and Norway and to tenth place in terms of GDP per capita at purchasing power parity (see list). GDP redirects here. ... PPP of GDP for the countries of the world (2003). ... This article includes two lists of countries of the world[1] sorted by their gross domestic product (GDP) at purchasing power parity (PPP) per capita, the value of all final goods and services produced within a nation in a given year divided by the average population for the same year. ...


In the 1990s, Switzerland had the weakest economic growth in Western Europe, averaging no appreciable increase (0,6 % annually) in gross domestic product (GDP). However, beginning in 1997, a global resurgence in currency movement provided the necessary stimulus to the Swiss economy. It slowly gained momentum and peaked in the year 2000 with 3.0% growth in real terms. A current understanding of Western Europe. ... GDP redirects here. ...


Being so closely linked to the economies of Western Europe and the United States, Switzerland was not able to escape the slowdown felt in these countries. In 2001 the rate of growth dropped to 0.9%, to 0.4 % in 2002 and in 2003 the real GDP contracted by 0.5%. The recent economic slowdown has had a noticeable impact on the labour market. The seasonally adjusted unemployment rate rose from its low of 1.9% in June 2000 to its peak of 3.9% in October 2004, although well below the European Union (EU) unemployment average of 8.9%. Labour economics seeks to understand the functioning of the market for labour. ...


The economic slowdown reached Swiss business in 2003. 1,157 companies declared bankruptcy during the first fiscal quarter, 21.9% more than a year before. Despite these signs, however, experts from the Swiss Federal Institute of Technology maintain that economic performance will remain solid well into the decade, since Switzerland has achieved one of the highest per capita incomes in the world with low unemployment rates and a low budget deficit, as a result of its finance industry. The service sector has also come to play a significant economic role. A company in the broadest sense is an aggregation of people who stay together for a common purpose. ... Notice of closure stuck on the door of a computer store the day after its parent company, Granville Technology Group Ltd, declared bankruptcy (strictly, put into administration—see text) in the United Kingdom. ... ETH Zurich (from its German name Eidgenössische Technische Hochschule Zürich, ETHZ) is the Swiss Federal Institute of Technology in Zürich, Switzerland. ...


This is a chart of trend of gross domestic product of Switzerland at market prices estimated by the International Monetary Fund with figures in millions of Swiss Francs.

Year Gross Domestic Product US Dollar Exchange
1980 183,077 1.67 Francs
1985 242,045 2.43 Francs
1990 327,584 1.38 Francs
1995 372,250 1.18 Francs
2000 415,529 1.68 Francs
2005 456,859 1.24 Francs
2006 471,781 1.25 Francs

Defining characteristics

Trade

Apart from industry, trade has been the key to prosperity in Switzerland. The country is dependent upon exports to generate income and on imports for raw materials and goods. With the notable exception of a strict policy of agricultural protectionism, Switzerland has liberal trade and investment policies. An expansive commercial and bank law system makes Switzerland one of the most secure investment places in the world. The Swiss franc is one of the world's soundest currencies, and the country is known for its high standard of Swiss banking and financial services. This article is about economic exchange. ... Economics In economics, an export is any good or commodity, shipped or otherwise transported out of a country, province, town to another part of the world, typically for use in trade or sale. ... ISO 4217 Code CHF User(s) Switzerland, Liechtenstein, Campione dItalia Inflation 1. ... Swiss banks are world-renowned for their stability, privacy and protection of clients. ...


The machinery, metals, electronics, and chemicals sectors are known for precision and quality. Together, they account for well over half of Switzerland's export revenues. The country is approximately 60% self-sufficient, taking only 7.5% of its imports from the U.S.


Switzerland ranks 18th among the main trading partners of the U.S. worldwide. The Swiss economy earns roughly half of its corporate earnings from the export industry and about 70% of Swiss exports are destined for the EU market.


The United States is the second-largest importer (9.1%) of Swiss goods after Germany (20.0%). Germany, on the other hand, exports more to Switzerland each year than to all the countries of the former Soviet Union and Eastern Europe combined. In addition, the United States is the largest foreign investor in Switzerland, and conversely, the primary destination of Swiss foreign investment. It is estimated that 200,000 American jobs depend on Swiss foreign investments. Total U.S.-Swiss bilateral trade, nevertheless, decreased by 12% to $17.16 billion during 2002 compared to the previous year. Statistical regions of Europe as delineated by the United Nations (UN definition of Eastern Europe marked red):  Northern Europe  Western Europe  Eastern Europe  Southern Europe Pre-1989 division between the West (grey) and Eastern Bloc (orange) superimposed on current borders: Russia (dark orange), other countries formerly part of the USSR...


Agricultural protectionism

Switzerland is extremely protective of its agricultural industry. High tariffs and extensive domestic subsidisations ensure that the country will remain largely self sufficient agriculturally. According to the Organisation for Economic Co-operation and Development (OECD), Switzerland is subsidizing more than 70% of its agriculture compared to 35% in the EU. The 2007 Agricultural Program, recently adopted by the Swiss Federal Assembly, will increase subsidies by SF 63 million to SF 14.092 billion. The Organisation for Economic Co-operation and Development (OECD), (in French: Organisation de coopération et de développement économiques; OCDE) is an international organisation of thirty countries that accept the principles of representative democracy and a free market economy. ...


The stringent policy of agricultural protectionism is generally harmful to the workforce[citation needed]. Domestic agriculture will monopolise labour that can be better deployed elsewhere and acts as a shield against beneficial import of labour[citation needed]. Consequently, Switzerland has a high cost of living in not only food but also rents, since much land needed for human occupation is retained by farms. About 40% of Switzerland is used for agricultural purposes.


Tourism

Switzerland has a highly developed tourism infrastructure, making it a good market for tourism-related equipment and services. Tourism contributes about SF 1.5 billion to the Swiss economy every year. Tourists are drawn to Switzerlands Alpine climate and landscapes, in particular for skiing and mountaineering. ...


Workforce

The Swiss economy is characterised by a skilled and peaceful workforce. One quarter of the country's full-time workers are unionised. Labour and management relations are amicable, characterised by a willingness to settle disputes instead of resorting to labour action. About 600 collective bargaining agreements exist today in Switzerland and are regularly renewed without major problems. Compared with other Western European countries, Trade unions play a rather minor role in Switzerland with only every fourth employee organized in a union or confederation. ...


With the bankruptcies in 2003, however, the mood is changing. Massive layoffs resulting from the global economic slowdown, major management scandals, and different foreign investment attitudes have strained the traditional Swiss labour peace. Swiss trade unions have encouraged strikes against several companies, including Swiss International Air Lines, Coca-Cola, and Orange. Total days lost to strikes, however, remain among the lowest in the OECD. For other uses, see Swiss (disambiguation). ... The Coca-Cola Companys headquarters in Atlanta, GA. The Coca-Cola Company (NYSE: KO) is an international beverage and food manufacturer whose headquarters are in Atlanta, Georgia, in the United States of America. ... See also Orange (disambiguation) for other meanings of the word. ...


Income

Switzerland is among the world's most prosperous countries in terms of private income. In 2003 the median household income in Switzerland was an estimated 96,000 CHF or US$ 88,422.21,[5] 106% higher than the 2003 U.S. median of $43,000,[6] slightly less than that of the wealthiest U.S. state at that time, New Hampshire.[7] The median household income is commonly used to provide data about geographic areas and divides households into two equal segments with the first half of households earning less than the median household income and the other half earning more. ... CHF is: The ISO 4217 code for the Swiss franc. ... The United States dollar is the official currency of the United States. ... For information on the income of individuals, see Personal income in the United States. ... For other uses, see New Hampshire (disambiguation). ...


Economic policy

Terrorism

Through the United States-Swiss Joint Economic Commission (JEC), Switzerland has passed strict legislation covering anti-terrorism financing and the prevention of terroristic acts, marked by the implementation of several anti-money laundering procedures and the seizure of al-Qaeda accounts. Continued relationship with the United States through the JEC has brought the Swiss economy into closer proximity with that of the Western world, with mutualistic goals in terrorism prevention providing the impetus. Al-Qaeda (Arabic: القاعدة, the foundation or the base) is the name given to a worldwide network of militant Islamist organizations under the leadership of Osama bin Laden. ...


European Union

Apart from agriculture, economic and trade barriers between the European Union and Switzerland are minimal. In the wake of the Swiss voters' rejection of the European Economic Area Agreement in 1992, the Swiss Government set its sights on negotiating bilateral economic agreements with the EU. Four years of negotiations culminated in Bilaterals, a cross-platform agreement covering seven sectors: research, public procurement, technical barriers to trade, agriculture, civil aviation, land transport, and the free movement of persons. Parliament officially endorsed the Bilaterals in 1999 and it was approved by general referendum in May 2000. The agreements, which were then ratified by the European Parliament and the legislatures of its member states, entered into force on June 1, 2002. The Swiss government has since embarked on a second round of negotiations, called the Bilaterals II, which will further strengthen the two organisations' economic ties.  EFTA countries (except Switzerland)  EU countries Together these form the EEA. The European Economic Area (EEA) came into being on January 1, 1994 following an agreement between the European Free Trade Association (EFTA) and the European Union (EU). ... is the 152nd day of the year (153rd in leap years) in the Gregorian calendar. ... Also see: 2002 (number). ...


Switzerland has since brought most of their practices into conformity with European Union policies and norms in order to maximise the country's international competitiveness. While most of the EU policies are not contentious, police and judicial cooperation to international law enforcement and the taxation of savings are controversial, mainly because of possible side effects on bank secrecy.


Swiss and EU finance ministers agreed in June 2003 that Swiss banks would levy a withholding tax on EU citizens' savings income. The tax would increase gradually to 35% by 2011, with 75% of the funds being transferred to the EU. Recent estimates value EU capital inflows to Switzerland to $8.3 billion.


Institutional membership

Switzerland is a member of a number of international economic organizations, including the United Nations, the World Trade Organization, the International Monetary Fund, the World Bank, and the Organisation for Economic Co-operation and Development. UN redirects here. ... WTO redirects here. ... IMF redirects here. ... The World Bank logo The World Bank (the Bank) is a part of the World Bank Group (WBG), is a bank that makes loans to developing countries for development programs with the stated goal of reducing poverty. ... The Organisation for Economic Co-operation and Development (OECD), (in French: Organisation de coopération et de développement économiques; OCDE) is an international organisation of thirty countries that accept the principles of representative democracy and a free market economy. ...


See also

Somewhat unusually for a landlocked country, Switzerland has a long tradition of civilian navigation, both on its lakes and rivers, and on the high seas. ... The economy of Europe comprises more than 710 million people in 48 different states. ... The Federation of the Swiss Watch Industry FH is the Swiss watch industrys leading trade association. ... The 2000 Watt society is a vision, originated by the Swiss Federal Institute of Technology at the end of the 1998, in which each person in the developed world would cut their energy use to an average of no more than 2,000 Watts by the year 2050, without lowering... The Swiss National Bank is a central bank and responsible for the monetary policy of Switzerland. ...

References

  1. ^ CIA GDP ranking. Retrieved on 2008-1-09.
  2. ^ International Monetary Fund.
  3. ^ see poverty in Switzerland
  4. ^ CIA Factbook Swiss Economy
  5. ^ Swiss Government, median household income, 2003. Retrieved on 2007-01-19.
  6. ^ Infoplease, median household income. Retrieved on 2006-06-29.
  7. ^ US Census Bureau, median household income by state 2004. Retrieved on 2006-07-01.

Year 2007 (MMVII) was a common year starting on Monday of the Gregorian calendar in the 21st century. ... is the 19th day of the year in the Gregorian calendar. ... Year 2006 (MMVI) was a common year starting on Sunday of the Gregorian calendar. ... is the 180th day of the year (181st in leap years) in the Gregorian calendar. ... Year 2006 (MMVI) was a common year starting on Sunday of the Gregorian calendar. ... is the 182nd day of the year (183rd in leap years) in the Gregorian calendar. ...

External links

Wikimedia Commons has media related to:
Economy of Switzerland
  • OECD's Switzerland country Web site and OECD Economic Survey of Switzerland
  • SWISS MARKET IND
  • Swiss Federal Statistical Office
  • Gross Domestic Product Growth - Switzerland
  • Swiss Economic Forecasts
The list of unrecognized countries enumerates those geo-political entities which lack general diplomatic recognition, but wish to be recognized as sovereign states. ...  Southwest Asia in most contexts. ... The borders of the continents are the limits of the several continents of the Earth, as defined by various geographical, cultural, and political criteria. ...  The North American plate, shown in brown The North American Plate is a tectonic plate covering most of North America, extending eastward to the Mid-Atlantic Ridge and westward to the Cherskiy Range in East Siberia. ...  The African plate, shown in pinkish-orange The African Plate is a tectonic plate covering the continent of Africa and extending westward to the Mid-Atlantic Ridge. ...

  Results from FactBites:
 
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Switzerland adopted a federal constitution in 1848, amending it extensively in 1874 and establishing federal responsibility for defense, trade, and legal matters.
Switzerland is a prosperous and stable modern market economy with a per capita GDP higher than that of the big western European economies.
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Switzerland is a federation of relatively autonomous cantons, some of which have a history of confederacy that goes back more than 700 years, arguably putting them among the world's oldest surviving republics.
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Switzerland is a prosperous and stable modern market economy, with a per capita GDP that is higher than those of the big western European economies.
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