Switzerland flag Switzerland: Economic outline

Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

For centuries Switzerland has adhered to a policy of armed neutrality in global affairs, which has given it the access and political stability to become one of the world's wealthiest countries, with an efficient market economy. Its standard of living, industrial productivity and quality of education and health care systems are among the highest in Europe. The global economic crisis triggered by the Covid-19 pandemic caused a slowdown in Swiss growth; nevertheless, the country’s economy continued to recover strongly in 2021 thanks to the easing of most COVID-19 restrictions, with GDP rising above the pre-crisis level of Q4 2019 over the summer. Overall, GDP grew an estimated 3.7% in 2021, thanks to buoyant domestic demand, in particular private consumption, and investment. However, international supply and capacity bottlenecks are putting pressure on the industrial sector, that coupled with the measures taken to contain the impact of the Omicron variant are expected to cause a slowdown in economic growth, projected at 3% this year and 1.4% in 2023 (IMF), when growth in domestic demand and the export industry should gradually decrease.

Due to the Covid-19 crisis, public finances have been under pressure in recent years. The government implemented fiscal support measures amounting in total to about 5.3% of GDP for 2020 and 2021, resulting in a negative budget deficit (1.5% of GDP in 2021). As the situation normalizes and the economy rebounds, the IMF expects the budget to be positive by 0.1% over the forecast horizon. The debt-to-GDP ratio increased only marginally, to reach 42.7% in 2021, and is projected to follow a downward trend this year (41.6%) and in 2023 (40.9%). Increased prices for energy and materials prompted a small rise in inflation, which stood at 0.4% in 2021 (from deflation of 0.7% one year earlier). IMF analysts predict a marginal increase of inflation at 0.6% and 0.8% in 2022 and 2023, respectively, still well below the Swiss National Bank's 2% target. Switzerland remains high atop the list of preferred tax havens due to its low taxation of foreign corporations and individuals. The flow of overseas wealth to the country has come in for much criticism in past years, due to concerns over tax evasion. However, after signing an agreement on the automatic exchange of information with the European Union, Switzerland put an end to bank secrecy. Since then, Swiss banks are required to share their clients' information with foreign tax authorities.

Thanks to short-time working schemes, the crisis’ overall impact on employment remained muted, with a marginal increase in the unemployment rate from a pre-pandemic level of 2.3% to 3.1% in 2021. Employment growth shall be slow over the forecast horizon, with the unemployment rate fluctuating around 3%. Overall, Switzerland is one of the wealthiest countries in the world, with a GDP per capita (PPP) estimated at USD 75,880 in 2021 by the IMF (the 11th-highest worldwide). Nevertheless, according to the latest data available from the Federal Statistical Office, 8.7% of the Swiss population are affected by income poverty.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 732.49e751.88e810.83862.82897.98
GDP (Constant Prices, Annual % Change) 1.2e-2.5e3.73.01.4
GDP per Capita (USD) 85,722e87,367e93,51598,771102,030
General Government Balance (in % of GDP) 1.1e-2.1e-1.50.10.1
General Government Gross Debt (in % of GDP) 39.8e42.4e42.741.640.9
Inflation Rate (%) 0.4-0.7e0.40.60.8
Unemployment Rate (% of the Labour Force) 2.33.1e3.13.03.0
Current Account (billions USD) 49.1328.5058.4764.8665.03
Current Account (in % of GDP) 6.73.8e7.27.57.2

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Swiss Franc (CHF) - Average Annual Exchange Rate For 1 GBP 1.331.271.301.251.20

Source: World Bank, 2015

 

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Latest Update: June 2022

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