General Information » Economy » Switzerland Overview

For over 150 years, especially between 1948 and 1975, Switzerland experienced fairly strong and steady economic growth. During the 1980s the economy began to plateau and by the early 1990s, growth of the GDP (gross domestic product) had virtually ground to a halt. The economy picked up again after 1996, albeit with a modest average annual GDP growth of about 2.3 % between 1996 and 2000. Since 2000 the GDP growth has slowed further, hitting -0.5% in 2003. However, in mid 2003 an economic recovery began with a strengthening of the external environment and a gradual decline in unemployment. In 2004 the GDP growth rate rose to 1.8% and is estimated at two percent growth for 2005 by the Swiss State Secretariat for Economic Affairs.

Despite meagre GDP growth Switzerland has one of the highest per capita incomes in Europe, if not the world. According to the World Bank, Switzerland’s per capita income for 2003 was SFr 47,925, though this figure varies from less than SFr 35,000 in some cantons to well over SFr 50,000 in others.

There has never been enough arable land available for Switzerland to become self-sufficient in terms of food production – the soil is not naturally fertile and peasants always had to work especially hard to produce crops – in fact currently only two percent of the country’s GDP is derived from agriculture. Switzerland’s mineral resources are practically non existent, with the exception of salt, so the country has to rely heavily on imports. Consequently the country has had to develop its own niche industries, such as clock and watch making, banking, insurance, pharmaceuticals, precision machines and instruments, hydroelectricity and, of course, chocolate and cheese. In the 17th century Switzerland was famous for its textile industry, having developed highly specialised precision machines. Such levels of industrial and economic development were achieved mainly because of a hardworking and well trained work force, and also by focusing on quality and precision rather than quantity.

With this background it’s no surprise that Switzerland favours the principles of free trade with low customs taxes on industrial goods and few limitations on imports. The Swiss have also been cooperating closely with various international economic organisations, such as the WTO (World Trade Organisation), the United Nations and the European Union, for many years. They recently signed seven bilateral conventions with the European Union, which came into effect in June 2002 and which should help to boost Switzerland’s free trade economy, considering exports are mainly to neighbouring European coun...