Switzerland Economy Facts

by ebizdir · Published January 30, 2023 · Updated February 22, 2023

Economical overview

Counted per inhabitant, Switzerland is one of the world’s richest countries. The standard of living is very high, unemployment is quite modest and inflation is low. Raw materials are bad, they are mainly imported. Instead, prosperity is based on banking and financial services, a modern industrial sector with the manufacture and export of machinery and electronics, among others, and tourism.

Thanks to political stability, a conflict-free labor market and a business-friendly climate, many international companies have applied to the country. Investments in education, research and innovation contribute to success. The government’s economic policy is based on a liberal market economy with as few state interventions as possible.

Countryaah.com: Major imports by Switzerland, covering a full list of top products imported by the country and trade value for each product category.

Switzerland is one of the world’s leading financial centers, with a wide range of banks and other financial institutions. The financial system accounts for over 10 percent of gross domestic product (GDP). In addition to general stability, a well-developed network of capital services and strict banking secrecy has helped to secure Switzerland’s strong position. However, banking secrecy has seriously begun to loosen up, following long-standing international criticism. The US, the EU and the economic cooperation organization OECD have pushed for greater transparency in the banking and financial system.

Claims first came mainly from the United States, when it was found that major drug syndicates “laundered” illegally accessed money in Swiss banks. Then in the late 1990s came the demands for clarity on the accounts that persecuted Jews opened before and during the Second World War. By law, banks are now required to inform authorities about transactions suspected of being linked to crime. Switzerland has also increasingly been forced to reverse its banking secrecy for residents in other countries. From 2005, Switzerland began taxing interest on EU residents’ accounts in the country, transferring the money to the account holder’s home country. From 2009, Switzerland signed bilateral agreements to exchange information on accounts; after a few years, agreements had been signed with some 50 countries.

Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including SUI which represents the country of Switzerland. Check findjobdescriptions to learn more about Switzerland.

The United States has also been pushing the issue, but to a greater extent through the judiciary. A dozen banks have been accused of actively assisting in fraud against the US state by hiding assets in secret bank accounts. The United States has settled with the two largest Swiss banks: UBS agreed to pay $ 780 million in damages in 2009, and to release lists of 4,500 people with accounts, while in 2014 Crédit Suisse agreed to pay $ 2.6 billion. Switzerland’s oldest bank Wegelin, founded in 1741, closed again after pleading guilty in 2013 to helping US citizens evade taxes. Swiss finance companies no longer accept US customers and no longer have US assets on accounts in Switzerland.

German, French and Belgian authorities have also launched investigations against Swiss banks. Even in the area of corporate taxes, pressure has increased on Switzerland in recent years.

Other external circumstances also affect the economy. The global financial crisis of 2008 left its mark, as did the subsequent eurozone debt crisis. The increased investor interest in the Swiss franc, and the exchange rate rose sharply against the euro and the dollar. The export industry experienced problems and for the tourism sector, the expensive currency meant that foreign tourists did not show up. As a result, in September 2011, the central bank decided that the franc should cost a maximum of EUR 1.20. The pressure on the currency continued, despite more countermeasures. It became expensive for the central bank to buy euros. In January the ceiling against the euro was abandoned and the franc was allowed to float freely. The result was that the franc was speeding, with a new decline in the competitiveness of industry and the tourism industry as a result.