Economy of Switzerland

The economy of Switzerland is one of the world's most advanced free market economies. The service sector has come to play a significant economic role, particularly the Swiss banking industry and tourism. The economy of Switzerland ranks first in the world in the 2015 Global Innovation Index[11] and the 2017 Global Competitiveness Report.[12] According to United Nations data for 2016, Switzerland is the third richest landlocked country in the world after Liechtenstein and Luxembourg, and together with the latter and Norway the only three countries in the world with a GDP per capita above US$70,000 that are neither island nations nor ministates.[13]

Economy of Switzerland
Zürich Switzerland-Hechtplatz-01
The city of Zurich, the most important economic center of the country
CurrencySwiss franc (CHF) ≈ 1 USD
Calendar year
Trade organisations
EFTA, WTO and OECD
Statistics
GDPIncrease $703.750 billion (nominal, 2018 est.)[1]
Increase $548.483 billion (PPP, 2018 est.)[1]
GDP rank20th (nominal, 2018)
39th (PPP, 2018)
GDP growth
1.5% (2016) 1.6% (2017)
2.5% (2018e) 1.0% (2019e)[1]
GDP per capita
Increase $82,950 (nominal, 2018 est.)[1]
Increase $64,649 (PPP, 2018 est.)[1]
GDP per capita rank
2nd (nominal, 2018)
9th (PPP, 2018)
GDP by sector
agriculture: 0.7%
industry: 25.6%
services: 73.7% (2017 est.)[2]
0.835% (2019 est.)[1]
0.934% (2018 est.)[1]
0.534% (2017)[1]
Population below poverty line
6.6% in poverty (2014 est.)[2]
Positive decrease 17.8% at risk of poverty or social exclusion (2016)[3]
Positive decrease 29.4 low (2016, Eurostat)[4]
Labour force
5.159 million (2017 est.)[2]
Labour force by occupation
agriculture 3.3%
Industry 19.8%
services 76.9 (2015)[2]
UnemploymentPositive decrease 3.2% (2017 est.)[2]
Average gross salary
$62,283, annual (2017)[5]
Main industries
Decrease 38th (2019)[6]
External
ExportsDecrease $313.5 billion (2017 est.)[2][note 1]
Export goods
machinery, chemicals, metals, watches, agricultural products
Main export partners
 Germany 15.2%
 United States 12.3%
 China 8.2%
 India 6.7%
 France 5.7%
 United Kingdom 5.7%
 Hong Kong 5.4%
 Italy 5.3% (2017)[2]
ImportsDecrease $264.5 billion (2017 est.)[2]
Import goods
machinery, chemicals, metals, watches, agricultural products
Main import partners
 Germany 20.9%
 United States 7.9%
 Italy 7.6%
 United Kingdom 7.3%
 France 6.8%
 China 5% (2017)[2]
FDI stock
Increase $1.489 trillion (31 December 2017 est.)[2]
Increase Abroad: $1.701 trillion (31 December 2017 est.)[2]
Increase $66.55 billion (2017 est.)[2]
Negative increase $1.664 trillion (31 March 2016 est.)[2]
Public finances
Steady 41.8% of GDP (2017 est.)[2][note 2]
1.1% (of GDP) (2017 est.)[2]
Revenues242.1 billion (2017 est.)[2]
Expenses234.4 billion (2017 est.)[2] [note 3]
Economic aidDonor: ODA 2.31 billion CHF (0.47% of GDP)[7]
Foreign reserves
Increase $811.2 billion (31 December 2017 est.)[2]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

History

19th century

Switzerland as a federal state was established in 1848. Before that time, the city-cantons of Zurich and Basel in particular began to develop economically based on industry and trade, while the rural regions of Switzerland remained poor and underdeveloped. While a workshop system had been in existence throughout the early modern period, the production of machines began in 1801 in St. Gallen, with the third generation of machines imported from Great Britain. But in Switzerland, hydraulic power was often used instead of steam engines because of the country's mountainous topography and lack of significant deposits of coal. By 1814, hand weaving had been mostly replaced by the power loom. Both tourism and banking began to develop as economic factors at about the same time. While Switzerland was primarily rural, the cities experienced an industrial revolution in the late 19th century, focused especially on textiles. In Basel, for example, textiles, including silk, were the leading industry. In 1888 women made up 44% of wage earners. Nearly half the women worked in the textile mills, with household servants the second largest job category. The proportion of women in the workforce was higher between 1890 and 1910 than it was in the late 1960s and 1970s.[14]

Railways played a major part in industrialization; the first railway opened in 1847, between Zurich and Baden. Due to competition between private players, Switzerland was covered with more than 1000 km of track by 1860.[15]

20th century

The industrial sector began to grow in the 19th century with a laissez-faire industrial/trade policy, Switzerland's emergence as one of the most prosperous nations in Europe, sometimes termed the "Swiss miracle", was a development of the mid 19th to early 20th centuries, among other things tied to the role of Switzerland during the World Wars.[16]

Switzerland's total energy consumption, which was dropping from the mid 1910s to the early 1920s, started to increase again in the early 1920s. It stagnated during the 1930s before falling again during the early 1940s; but rapid growth started once again in the mid 1940s.[17]

In the 1940s, particularly during World War II, the economy profited from the increased export and delivery of weapons to Germany, France, the United Kingdom, and other European countries. However, Switzerland's energy consumption decreased rapidly. The co-operation of the banks with the Nazis (although they also co-operated extensively with the British and French) and their commercial relations with the Axis powers during the war were later sharply criticised, resulting in a short period of international isolation of Switzerland. , Switzerland's production facilities were largely undamaged by the war, and afterwards both imports and exports grew rapidly.[18]

In the 1950s, annual GDP growth averaged 5% and Switzerland's energy consumption nearly doubled. Coal lost its rank as Switzerland's primary energy source, as other imported fossil fuels, such as crude and refined oil and natural and refined gas, increased.[19]

In the 1960s, annual GDP growth averaged 4% and Switzerland's total energy consumption nearly doubled again. By the end of the decade oil provided over three-quarters of Switzerland's energy.[19]

In the 1970s the GDP growth rate gradually declined from a peak of 6.5% in 1970; GDP then contracted by 7.5% in 1975 and 1976. Switzerland became increasingly dependent on oil imported from its main suppliers, the OPEC cartel. The 1973 international oil crisis caused Switzerland's energy consumption to decrease in the years from 1973 to 1978.[19] In 1974 there were three nationwide car-free Sundays when private transport was prohibited as a result of the oil supply shock. From 1977 onwards GDP grew again, although Switzerland was also affected by the 1979 energy crisis which resulted in a short-term decrease in Switzerland's energy consumption. In 1970 industry still employed about 46% of the labor force, but during the economic recession of the 1970s the services sector grew to dominate the national economy. By 1970 17.2% of the population and about one quarter of the work force were foreign nationals, though job losses during the economic recession decreased this number.[18]

In the 1980s, Switzerland's economy contracted by 1.3% in 1982 but grew substantially for the rest of the decade, with annual GDP growth between about 3% and 4%, apart from 1986 and 1987 when growth decreased to 1.9% and 1.6% respectively.[20]

Switzerland's economy was marred by slow growth in the 1990s, having the weakest economic growth in Western Europe. The economy was affected by a three-year recession from 1991 to 1993, when the economy contracted by 2%. The contraction also became apparent in Switzerland's energy consumption and export growth rates. Switzerland's economy averaged no appreciable increase (only 0.6% annually) in GDP.

After enjoying unemployment rates lower than 1% before 1990, the three-year recession also caused the unemployment rate to rise to its all-time peak of 5.3% in 1997. In 2008, Switzerland was in second place among European countries with populations above one million in terms of nominal and purchasing power parity GDP per capita, behind Norway (see list). Several times in the 1990s, real wages decreased since nominal wages could not keep up with inflation. 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 3.7% growth in real terms.[21]

2000s

Labour productivity levels in Europe. OECD, 2015
The labour productivity level of Switzerland OECD, 2017[22]

In the early 2000s recession, being so closely linked to the economies of Western Europe and the United States, Switzerland could not escape the slowdown in these countries. After the worldwide stock market crashes in the wake of the 9/11 terrorism attacks, there were more announcements of false enterprise statistics and exaggerated managers' wages. The rate of GDP growth dropped to 1.2% in 2001; 0.4% in 2002; and minus 0.2% in 2003. This economic slowdown had a noticeable impact on the labour market.

Many companies announced mass dismissals and thus the unemployment rate rose from its low of 1.6% in September 2000 to a peak of 4.3% in January 2004,[23] although well below the European Union (EU) rate of 9.2% at the end of 2004.[24]

On 10 November 2002 the economics magazine Cash suggested five measures for political and economic institutions to implement to revive the Swiss economy:

1. Private consumption should be promoted with decent wage increases. In addition to that, families with children should get discounts on their health insurance.

2. Switzerland's national bank should revive investments by lowering interest rates. Besides that, monetary institutions should increasingly credit consumers and offer cheaper land to be built on.

3. Switzerland's national bank was asked to devalue the Swiss Franc, especially compared to the Euro.

4. The government should implement the anti-cyclical measure of increasing budget deficits. Government spending should increase in the infrastructure and education sectors. Lowering taxes would make sense in order to promote private household consumption.

5. Flexible work schedules should be instituted, thus avoiding low demand dismissals.

These measures were applied with successful results while the government strove for the Magical Hexagon of full employment, social equality, economic growth, environmental quality, positive trade balance and price stability. The rebound which started in mid-2003 saw growth rate growth rate averaging 3% (2004 and 2005 saw a GDP growth of 2.5% and 2.6% respectively; for 2006 and 2007, the rate was 3.6%). In 2008, GDP growth was modest in the first half of the year while declining in the last two quarters. Because of the base effect, real growth came to 1.9%. While it contracted 1.9% in 2009, the economy started to pick up in Q3 and by the second quarter of 2010, it had surpassed its previous peak. Growth for 2010 was 2.6%[25]

The stock market collapse of 2007-2009 deeply affected investment income earned abroad. This translated to a substantial fall in the surplus of the current account balance. In 2006, Switzerland recorded a 15.1% per GDP surplus. It went down to 9.1% in 2007 and further dropped to 1.8% in 2008. It recovered in 2009 and 2010 with a surplus of 11.9% and 14.6% respectively.[26] Unemployment peaked in December 2009 at 4.4%. In August 2018 the unemployment rate was 2.4%.[23]

The chart below shows the trend of the gross domestic product of Switzerland at market prices:[27]

Year GDP (billions of CHF) US Dollar Exchange
1980 184 1.67 Francs
1985 244 2.43 Francs
1990 331 1.38 Francs
1995 374 1.18 Francs
2000 422 1.68 Francs
2005 464 1.24 Francs
2006 491 1.25 Francs
2007 521 1.20 Francs
2008 547 1.08 Francs
2009 535 1.09 Francs
2010 546 1.04 Francs
2011 659 0.89 Francs
2012 632 0.94 Francs
2013 635 0.93 Francs
2014 644 0.92 Francs
2015 646 0.96 Francs
2016 659 0.98 Francs
2017 668 1.01 Francs
2018 694 1.00 Francs

Data

The following table shows the main economic indicators in 1980–2017. Inflation under 2% is in green.[28]

Year GDP
(in Bil. CHF)
GDP per capita
(in CHF)
GDP growth
(real)
Inflation rate
(in Percent)
Unemployment
(in Percent)
Government debt
(in % of GDP)
1980 199.3 31,620 Increase5.1 % Negative increase4.0 % 0.2 % k. A.
1981 Increase214.0 Increase33,767 Increase1.6 % Negative increase6.5 % Steady0.2 % k. A.
1982 Increase226.5 Increase35,546 Decrease−1.3 % Negative increase5.7 % Negative increase0.4 % k. A.
1983 Increase233.6 Increase36,441 Increase0.6 % Negative increase3.0 % Negative increase0.9 % k. A.
1984 Increase249.7 Increase38,846 Increase3.1 % Negative increase2.9 % Negative increase1.1 % k. A.
1985 Increase264.8 Increase41,020 Increase3.7 % Negative increase3.4 % Positive decrease1.0 % k. A.
1986 Increase277.8 Increase42,844 Increase1.9 % Increase0.7 % Positive decrease0.8 % k. A.
1987 Increase288.3 Increase44,209 Increase1.6 % Increase1.4 % Steady0.8 % k. A.
1988 Increase306.4 Increase46,652 Increase3.3 % Increase1.9 % Positive decrease0.7 % k. A.
1989 Increase330.8 Increase49,970 Increase4.4 % Negative increase3.2 % Positive decrease0.6 % k. A.
1990 Increase358.4 Increase53,705 Increase3.6 % Negative increase5.4 % Positive decrease0.5 % 34.4 %
1991 Increase374.5 Increase55,432 Decrease−0.8 % Negative increase5.9 % Negative increase1.0 % Negative increase36.1 %
1992 Increase381.8 Increase55,808 Decrease−0.2 % Negative increase4.0 % Negative increase2.5 % Negative increase40.9 %
1993 Increase390.3 Increase56,507 Decrease−0.1 % Negative increase3.2 % Negative increase4.5 % Negative increase46.7 %
1994 Increase400.3 Increase57,439 Increase2.4 % Negative increase2.7 % Negative increase4.7 % Negative increase50.1 %
1995 Increase405.3 Increase57,745 Increase0.5 % Increase1.8 % Positive decrease4.2 % Negative increase52.9 %
1996 Increase408.2 Increase57,792 Increase0.6 % Increase0.8 % Negative increase4.7 % Negative increase54.4 %
1997 Increase415.8 Increase58,733 Increase2.3 % Increase0.5 % Negative increase5.2 % Negative increase57.2 %
1998 Increase427.4 Increase60,238 Increase2.9 % Increase0.0 % Positive decrease3.9 % Negative increase59.6 %
1999 Increase435.2 Increase61,087 Increase1.7 % Increase0.8 % Positive decrease2.7 % Positive decrease55.9 %
2000 Increase459.7 Increase64,173 Increase4.0 % Increase1.6 % Positive decrease1.8 % Positive decrease54.7 %
2001 Increase470.3 Increase65,341 Increase1.3 % Increase1.0 % Positive decrease1.7 % Positive decrease52.9 %
2002 Increase471.1 Decrease64,968 Increase0.2 % Increase0.6 % Negative increase2.5 % Negative increase59.1 %
2003 Increase475.6 Increase65,025 Increase0.1 % Increase0.6 % Negative increase3.7 % Positive decrease58.2 %
2004 Increase489.6 Increase66,483 Increase2.6 % Increase0.8 % Negative increase3.9 % Negative increase59.6 %
2005 Increase508.9 Increase68,636 Increase3.2 % Increase1.2 % Positive decrease3.8 % Positive decrease56.8 %
2006 Increase540.5 Increase72,465 Increase4.1 % Increase1.1 % Positive decrease3.3 % Positive decrease50.5 %
2007 Increase576.4 Increase76,763 Increase4.1 % Increase0.7 % Positive decrease2.8 % Positive decrease46.5 %
2008 Increase599.8 Increase78,991 Increase2.1 % Negative increase2.4 % Positive decrease2.6 % Positive decrease46.8 %
2009 Decrease589.4 Decrease76,530 Decrease−2.2 % Positive decrease−0.5 % Negative increase3.7 % Positive decrease45.2 %
2010 Increase608.2 Increase78,121 Increase2.9 % Increase0.7 % Positive decrease3.5 % Positive decrease44.0 %
2011 Increase621.3 Increase78,946 Increase1.8 % Increase0.2 % Negative increase2.8 % Negative increase44.1 %
2012 Increase626.2 Increase78,723 Increase1.0 % Positive decrease−0.7 % Negative increase2.9 % Negative increase44.7 %
2013 Increase638.3 Increase79,404 Increase1.8 % Positive decrease−0.2 % Negative increase3.2 % Positive decrease43.8 %
2014 Increase649.8 Increase79,827 Increase2.5 % Increase0.0 % Positive decrease3.0 % Positive decrease43.7 %
2015 Increase653.7 Decrease79,346 Increase1.2 % Positive decrease−1.1 % Negative increase3.2 % Positive decrease43.6 %
2016 Increase659.0 Decrease79,137 Increase1.4 % Positive decrease−0.4 % Steady3.2 % Positive decrease43.3 %
2017 Increase668.1 Increase79,357 Increase1.1 % Increase0.5 % Steady3.2 % Positive decrease42.8 %

Economic sectors

Panorama altstetten-station-sundown
The city of Zurich, the most important economic center of the country and one of the world's major financial centers, hosts the SIX Swiss Exchange.

The Swiss economy follows the typical developed country model with respect to the economic sectors. Only a small minority of the workers are involved in the primary or agricultural sector (1.3% of the population, in 2006) while a larger minority is involved in the secondary or manufacturing sector (27.7% in 2012). The majority of the working population are involved in the tertiary or services sector of the economy (71.0% in 2012).[29]

While most of the Swiss economic practices have been brought largely into conformity with the European Union's policies, some trade protectionism remains, particularly for the small agricultural sector.[30]

Watches

Switzerland is a leading exporter of high-end watches and clocks. Swiss companies produce most of the world's high-end watches: in 2011 exports reached nearly 19.3 billion CHF, up 19.2% over the previous year. The watches go to Asia (55%), Europe (29%), Americas (14%), Africa and Oceania (both 1%).[31]

In 2011, Switzerland lead the world by exporting over 20 billion USD value of all types of watches, followed by Hong Kong, at under USD$10 billion. China exported the highest number of watches by far in 2011.[31]

Industrial sector

Switzerland has one of the most competitive pharmaceutical industries in the world. Major Swiss pharmaceutical companies include Novartis and Roche.

Switzerland also has an extensive industrial sector, with globally competitive companies in various industrial sectors. Most noticeably, food processing like Nestlé, chemicals for industrial and construction use like Sika AG, and roof coating chemicals Sarnafil. LafargeHolcim is the largest construction materials group in the world.

Agriculture

Swiss landscape with cows
Swiss free-range cattle.
Emmentaler
Emmentaler (also known as Swiss Cheese), while some Swiss types are AOC restricted, generic Emmentaler is produced around the world.

Switzerland is extremely protective of its agricultural industry. High tariffs and extensive domestic subsidisations encourage domestic production, which currently produces about 60% of the food consumed in the country.

According to the Organisation for Economic Co-operation and Development (OECD), Switzerland is subsidising more than 70% of its agriculture compared to 35% in the EU. The 2007 Agricultural Program increased subsidies by CHF 63 million to CHF 14.092 billion.

Protectionism acts to promote domestic production, but not to reduce prices or the cost of production, and there is no guarantee the increased domestic production is actually consumed internally; it may simply be exported, to the profit of the producers. 90 to 100% of potatoes, vegetables, pork, veal, cattle and most milk products are produced in the country. Beyond that, Swiss agriculture meets 65% of the domestic food demand.[32] In 2016 the Swiss government spent about 5.5% of its total budget (over CHF 3.5 billion) on supporting food production.[33]

The first reform in agricultural policies was in 1993. Among other changes, since 1998 Switzerland has linked the attribution of farm subsidies with the strict observance of good environmental practice. Before farmers can apply for subsidies, they must obtain certificates of environmental management systems (EMS) proving that they: "make a balanced use of fertilizers; use at least 7% of their farmland as ecological compensation areas; regularly rotate crops; adopt appropriate measures to protect animals and soil; make limited and targeted use of pesticides."[34] 1,500 farms are driven out of business each year. But the number of organic farms increased by 3.3 percent between 2003 and 2004, and organic sales increased by 7 percent to $979 million.[35] Moreover, Swiss consumers consider less important the drawback of higher prices for organic food compared to conventional locally produced food.[32]

Trade

Tree map import che all show 2010 SITC4
Imports in 2010
Tree map export che all show 2010 SITC4
Exports in 2010

The CIA World Factbook estimates Switzerland's 2011 exports at $308.3 billion and the 2010 exports at $258.5 billion. Imports are estimated to be $299.6 billion in 2011 and $246.2 billion in 2010. According to the World Factbook numbers, Switzerland is the 20th largest exporter and the 18th largest importer.[30]

The United Nations Commodity Trade Statistics Database has lower numbers for Switzerland's exports and imports. The UN calculates exports at $223.5 billion in 2011 and $185.8 billion in 2010. The value of all imports in 2011 was $197.0 billion and in 2010 it was $166.9 billion.[36]

Switzerland's largest trading partner is Germany. In 2009, 21% of Switzerland's exports and 29% of its imports came from Germany. The United States was the second largest destination of exports (9.1% of total exports) and the fourth largest source of imports (6.7%).[37]

Switzerland's neighbors made up the next largest group: Italy was third for exports (8.6%) and second for imports (10%), France was fourth for exports (8%) and third for imports (8.1%), and Austria was fifth for exports (4.6%) and sixth for imports (3.7%). Major non-European trading partners included Japan (seventh for exports with 3.6% and twelfth for imports with 2%), China (eighth for exports and imports with 3.1% and 2.5% respectively), and Turkey (sixteenth for exports with 1.2% and ninth for imports with 2.3%).[37]

As a developed country with a skilled labor force, the majority of Swiss exports are precision or 'high tech' finished products. Switzerland's largest specific SITC categories of exports include medicaments, glycosides and vaccines, watches, orthopaedic appliances, and precious jewellery. Some raw ores or metals are exported, but the majority of the exports in this category are finished jewellery or other finished products. Agricultural products that Switzerland is famous for such as cheese (0.29%), wine (0.05%), and chocolate (0.39%) all make up only a small portion of Swiss exports.[37] Switzerland is also a significant exporter of arms and ammunition, and the third largest for small calibers[38] which accounted for 0.33% of the total exports in 2012.[39]

Switzerland's main imports include medicaments, cars, precious jewellery, and other unclassified transactions. While Switzerland has a long tradition of manufacturing cars,[40] there are currently no large-scale assembly line automobile manufacturers in the country.

Tourism

Mont Cervin Palace at night in Zermatt
The Mont Cervin Palace in Zermatt.

Switzerland has highly developed tourism infrastructure, especially in the mountainous regions and cities, making it a good market for tourism-related equipment and services.

14% of hotels were in Grisons, 12% each in the Valais and Eastern Switzerland, 11% in Central Switzerland and 9% in the Bernese Oberland. The ratio of lodging nights in relation to resident population ("tourism intensity", a measure for the relative importance of tourism to local economy) was largest in Grisons (8.3) and Bernese Oberland (5.3), compared to a Swiss average of 1.3. 56.4% of lodging nights were by visitors from abroad (broken down by nationality: 16.5% Germany, 6.3% UK, 4.8% USA, 3.6% France, 3.0% Italy) [41]

The total financial volume associated with tourism, including transportation, is estimated to CHF 35.5 billion (as of 2010) although some of this comes from fuel tax and sales of motorway vignettes. The total gross value added from tourism is 14.9 billion. Tourism provides a total of 144,838 full time equivalent jobs in the entire country. The total financial volume of tourist lodging is 5.19 billion CHF and eating at the lodging provides an additional 5.19 billion. The total gross value added of 14.9 billion is about 2.9% of Switzerland's 2010 nominal GDP of 550.57 billion CHF.[42][43]

Banking and finance

In 2003, the financial sector[44] comprised an estimated 11.6% of Switzerland's GDP and employed approximately 196,000 people (136,000 of whom work in the banking sector); this represents about 5.6% of the total Swiss workforce.[45]

Swiss neutrality and national sovereignty, long recognized by foreign nations, have fostered a stable environment in which the banking sector was able to develop and thrive. Switzerland has maintained neutrality through both World Wars, is not a member of the European Union, and was not even a member of the United Nations until 2002.[46][47] Currently an estimated 28 percent of all funds held outside the country of origin (sometimes called "offshore" funds) are kept in Switzerland.[48] In 2009 Swiss banks managed 5.4 trillion Swiss Francs.[49]

The Bank of International Settlements, an organization that facilitates cooperation among the world's central banks, is headquartered in the city of Basel. Founded in 1930, the BIS chose to locate in Switzerland because of the country's neutrality, which was important to an organization founded by countries that had been on both sides of World War I.[50] In May 2006, foreign banks operating in Switzerland managed 870 billion Swiss francs worth of assets.[51] In 2014, this number was estimated to be 960 billion Swiss francs.[52]

Connection to illegal activities

Swiss banks have served as safe havens for the wealth of dictators, despots, mobsters, arms dealers, corrupt officials, and tax cheats.[53][54][55]

Workforce

The Swiss economy is characterised by a skilled and generally '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. They take place between trade unions and branch associations, that are themselves often grouped in Union of Employers, like the Fédération patronale vaudoise or the Fédération des Entreprises Romandes Genève. About 600 collective bargaining agreements exist today in Switzerland and are regularly renewed without major problems. However, there is no country-wide minimum wage across sectors, but some collective bargaining agreement may contain minimum wage requirements for specific sectors or employers. A May 2014 ballot initiative which would have required a Swiss minimum wage to 22 Swiss francs an hour (corresponding to a monthly income of about 4000 Swiss francs) failed to pass, gaining only 23.7% support on the ballot.[56]

With the peak of the number of bankruptcies in 2003, however, the mood was pessimistic. Massive layoffs and dismissals by enterprises 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.

Income and wealth distribution

In 2013 the mean household income in Switzerland was CHF 120,624 (c. USD 134,000 nominal, USD 101,000 PPP), the mean household income after social security, taxes and mandatory health insurance was CHF 85,560 (c. USD 95,000 nominal, USD 72,000 PPP).[57] The OECD lists Swiss household gross adjusted disposable income per capita USD 32,594 PPP for 2011.[58]

As of 2016, Switzerland had the highest average wealth per adult, at $561,900.[59]

This development was tied to the exchange rate between the US Dollar and the Swiss franc, which caused capital in Swiss francs to more than double its value in dollar terms during the 2000s and especially in the wake of the financial crisis of 2007–2008, without any direct increase in value in terms of domestic purchasing power.[60]

The high average wealth is determined by the few who are extremely wealthy; the median (50th percentile) wealth of a Swiss adult is five times lower than the average, at USD 100,900 (USD 70,000 PPP as of 2011).[61]

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 terrorist acts, marked by the implementation of several anti-money laundering procedures and the seizure of al-Qaeda accounts.

European Union

Apart from agriculture, there are minimal economic and trade barriers between the European Union and Switzerland. 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 country's economic ties with the organisation.

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.

International comparison

Countries Agricultural
sector %
Manufacturing
sector %
Services
sector %
Unemployment
rate %
Unemployment
rate (females) %
Unemployment
rate (males) %
Average hours
worked per
week
Switzerland (2006)[29] 3.8 23 73.2 4.0 4.7 3.4 41.6
European Union-25 countries (2006)[62] 4.7 27.4 67.9 8.2 9 7.6 40.5
Germany (2014)[63] 2.1 24.4 73.5 5.2 4.9 5.5 41.2
France (2006)[64] 3.9 24.3 71.8 8.8 9.5 8.1 39.1
Italy (2006)[65] 4.2 29.8 66 6.6 8.5 5.2 39.3
United Kingdom (2006)[66] 1.3 22 76.7 5.3 4.8 5.7 42.4
United States (2005)[67] 1.6 20.6 77.8 5.1[68] 5.6[69] 5.9[69] 41[70]

Regional disparities

Cantons Tax index for all Federal, Cantonal and Church Taxes (Switzerland = 100.0)
2006
Median Church, Local and Cantonal Tax Rate (2011) by Family Status and Pre-Tax Income[71] Population under 20 as a percentage of total population aged 20–64
2007
National Income per person in CHF
2005
Change in National Income per person
2003-2005
Unmarried Married with 2 children
80,000 CHF 150,000 CHF 80,000 CHF 150,000 CHF
Coat of arms of Switzerland.svg Switzerland 100 14.43 21.12 4.9 12.29 34.59 54,031 5.3
Wappen Zürich matt.svg Zurich 82.9 11.01 17.31 4.50 10.52 31.12 68,803 4.6
Wappen Bern matt.svg Berne 123.1 14.75 21.96 6.79 14.23 33.05 45,643 5
Wappen Luzern matt.svg Lucerne 119 13.49 18.04 5.07 11.18 37.19 43,910 5.3
Wappen Uri matt.svg Uri 144.2 11.95 15.76 5.91 10.84 37.06 45,711 5.3
Wappen des Kantons Schwyz.svg Schwyz 66.5 8.53 13.04 3.33 7.77 36.95 50,170 6.3
Wappen Obwalden matt.svg Obwald 146.5 11.21 14.88 7.11 11.01 40.88 39,645 4.7
Wappen Nidwalden matt.svg Nidwald 79.1 10.73 15.07 3.66 9.39 34.55 73,285 15.6
Wappen Glarus matt.svg Glaris 134.8 11.99 17 5.51 11.22 36.85 73,236 10.9
Wappen Zug matt.svg Zoug 50.3 5.95 12.98 1.13 4.91 35.45 93,752 5.4
Wappen Freiburg matt.svg Friburg 126.4 15.18 21.88 5 12.89 40.2 39,559 2.6
Wappen Solothurn matt.svg Soleure 116.9 15.87 21.96 7.26 14.12 34.34 46,844 4.9
Wappen Basel-Stadt matt.svg Basle-City 113.1 14.98 20.61 3.9 13.36 26.6 115,178 15.9
Coat of arms of Kanton Basel-Landschaft.svg Basle-Country 92.5 14.52 22.07 3.37 12.64 33 53,501 3.9
Wappen Schaffhausen matt.svg Schaffhouse 114.6 13.68 20.1 5.63 11.44 32.92 55,125 5.4
Wappen Appenzell Ausserrhoden matt.svg Appenzell Outer-Rhodes 121.7 13.44 19.02 6.73 12.88 37.6 44,215 4.7
Wappen Appenzell Innerrhoden matt.svg Appenzell Inner-Rhodes 105.6 11.68 16.68 5.13 10.79 44.46 45,936 7.4
Wappen St. Gallen matt.svg St Gall 115.5 14.41 20.71 4.7 11.89 37.66 44,866 4
Wappen Graubünden matt.svg Grisons 112.2 13.79 20.16 3.97 11.37 33.97 49,355 11.7
Wappen Aargau matt.svg Argovia 87.4 13.56 19.62 4.79 11.78 34.9 49,209 2.5
Wappen Thurgau matt.svg Thurgovia 86.6 13.58 18.89 4.38 11.52 37.52 44,918 3.2
Wappen Tessin matt.svg Tessin 64.6 12.47 19.35 1.96 10.31 31.14 41,335 3.4
Wappen Waadt matt.svg Vaud 106.2 15.44 21.77 5.09 13.14 37.87 52,901 3.4
Wappen Wallis matt.svg Valais 121.3 14.71 22.94 4.29 10.41 35.18 38,385 6
Wappen Neuenburg matt.svg Neuchâtel 137.1 18.44 25.5 8.5 16.94 38.06 49,775 6.6
Wappen Genf matt.svg Geneva 89.8 14.29 21.61 0.83 10.27 35.4 62,839 5.1
Wappen Jura matt.svg Jura 126.6 17.22 24.76 7.7 16.16 40.09 38,069 6.4
Source:[72]

See also

Notes and references

Notes

  1. ^ trade data exclude trade with Switzerland
  2. ^ general government gross debt; gross debt consists of all liabilities that require payment or payments of interest and/or principal by the debtor to the creditor at a date or dates in the future; includes debt liabilities in the form of Special Drawing Rights (SDRs), currency and deposits, debt securities, loans, insurance, pensions and standardized guarantee schemes, and other accounts payable; all liabilities in the GFSM (Government Financial Systems Manual) 2001 system are debt, except for equity and investment fund shares and financial derivatives and employee stock options
  3. ^ Includes federal, cantonal and municipal accounts

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External links

2000-watt society

The 2000-watt society is an environmental vision, first introduced in 1998 by the Swiss Federal Institute of Technology in Zürich (ETH Zurich), which pictures the average First World citizen reducing their overall average primary energy usage to no more than 2,000 watts (i.e. 2 kWh per hour or 48 kWh per day) by the year 2050, without lowering their standard of living.

The concept addresses not only personal or household energy use, but the total for the whole society, including embodied energy, divided by the population.

Two thousand watts is approximately the current world average rate of total primary energy use. This compares to averages of around 6,000 watts in western Europe, 12,000 watts in the United States, 1,500 watts in China, 1,000 watts in India, 500 watts in South Africa and only 300 watts in Bangladesh. Switzerland itself, currently using an average of around 5,000 watts, was last a 2000-watt society in the 1960s.

It is further envisaged that the use of carbon-based fuels would be ultimately cut to no more than 500 watts per person within 50 to 100 years.

The vision was developed in response to concerns about climate change, energy security, and the future availability of energy supplies. It is supported by the Swiss Federal Office of Energy, the Association of Swiss Architects and Engineers, and other bodies.

Baselworld

Baselworld Watch and Jewellery Show is a trade show of the international watch and jewellery industry, organized each spring in the city of Basel, Switzerland, at Messe Basel.

It comprises about 2,100 exhibitors from over 45 countries, including the leading watch and jewellery brands, as well as companies specializing in precious gems. The show attracts over 94,000 visitors.

The latest Baselworld was held March 21-26, 2019.Baselworld belongs to the MCH Group which also organizes Art Basel in Basel, Miami Beach and Hong Kong.

Lengenbach Quarry

The Lengenbach Quarry (LGB) is located in the Binn Valley (Valais, Switzerland) and it is noted among the mineralogical community for its unusual sulfosalt specimens.

List of Swiss cantons by GDP

This article is about the gross regional product (GRP) of Swiss cantons in main fiscal years. All figures are from the Federal Statistical Office of Switzerland.

List of Swiss people by net worth

This is a list of Swiss billionaires based on an annual assessment of wealth and assets compiled and published by Forbes magazine in 2017.

List of regions of Switzerland by Human Development Index

This is a list of NUTS2 statistical regions of Switzerland by Human Development Index as of 2018 with data for the year 2018. In the same year the Zurich Region had the highest HDI Score out of 1621 sub-national regions of the world.

Manufacture d'horlogerie

Manufacture d'horlogerie (meaning "watchmaking manufacturer") is a French language term of horology that has also been adopted in English language as a loanword. In horology, the term is usually encountered in its abbreviated form manufacture. This term is used when describing a wrist watch movement or watchworks fabricator which makes all or most of the parts required for its products in its own production facilities, as opposed to simply assembling watches using parts purchased from other firms.

Merchant Marine of Switzerland

The Merchant Marine of Switzerland is the largest merchant navy of a landlocked country. Somewhat unusual for a landlocked country, Switzerland has a long tradition of civilian navigation, both on its lakes and rivers, and on the high seas.

Public Eye (organization)

Public Eye is a sustainability-oriented, politically and religiously independent solidarity development non-governmental organisation based in Switzerland.

Public Eye notably encourages Swiss politics and business to respect human rights and the environment in poor countries.

Public Eye on Davos

The Public Eye on Davos, held every year between 2000 and 2015, was a counter-event to the annual meeting of the World Economic Forum in Davos.

The project involved non-governmental organizations (NGOs) from around the world and was coordinated by Swiss organizations Erklärung von Bern (EvB, renamed "Public Eye" in 2016) and Greenpeace Switzerland. The Public Eye is a platform for substantial criticism of "purely profit-oriented globalization". The focus of the Public Eye Awards since 2005 has been on corporate social responsibility. In 2009, the Positive category was for the first time awarded for a courageous employee for his or her exemplary contributions.

Revenue stamps of Basel

The Swiss canton and city of Basel issued revenue stamps. The Basel canton issued a total of 22 different stamps in 8 sets, for unemployment insurance and police tax. The city of Basel issued revenue stamps from 1860 to 1975. There were various types for different taxes. Taxes in Switzerland are levied by the Swiss Confederation, the cantons and the municipalities.

Swiss Cheese Union

The Swiss Cheese Union (German: Schweizer Käseunion AG, pronounced [ˈʃvaɪtsər ˈkɛːzə.uˌni̯oːn aːˈɡeː]) was a marketing and trading organization in Switzerland, which from 1914 to 1999 served as a cartel to control cheese production. To this end, the Swiss Cheese Union mandated production be limited to only 3 varieties: Gruyere, Emmental, and Sbrinz, and bought the entire production and distribution of cheese at prices set by the Swiss Federal Council. It also coordinated the national and international marketing for these three varieties of cheese.

The Swiss Cheese Union was successful in campaigning for cheese fondue and raclette becoming national dishes in Switzerland. Before that, they were both regional dishes.

The Swiss Cheese Union sponsored the 1992-1993 Swiss National Ski Team. The team wore yellow ski suits with simulated cheese holes.

Swiss Financial Market Supervisory Authority

The Swiss Financial Market Supervisory Authority (FINMA) is the Swiss government body responsible for financial regulation. This includes the supervision of banks, insurance companies, stock exchanges and securities dealers, as well as other financial intermediaries in Switzerland.

The FINMA is an independent institution with its own legal personality based in Bern. It is institutionally, functionally and financially independent from the central federal administration and the Federal Department of Finance and reports directly to the Swiss parliament.

The FINMA is called German: Eidgenössische Finanzmarktaufsicht, French: Autorité fédérale de surveillance des marchés financiers, Italian: Autorità federale di vigilanza sui mercati finanziari. Its main name and its acronym are expressed in English so as to avoid the semblance of favouring any one of Switzerland's linguistic regions.

Anne Héritier Lachat was Chairwoman of the Board of Directors from 2011 until 1 January 2016 when Thomas Bauer, former Ernst & Young partner became Chairman.

Swiss National Bank

The Swiss National Bank (SNB) is the central bank of Switzerland, and is therefore responsible for the monetary policy of the nation of Switzerland and also for the issuing of Swiss franc banknotes.

The bank is otherwise known as: German: Schweizerische Nationalbank; French: Banque nationale suisse; Italian: Banca nazionale svizzera; Romansh: Banca naziunala svizra, which are the four official languages of the country.

The SNB is an aktiengesellschaft under special regulations, and has two head offices, one is in Bern and the other one in Zurich.

Swiss chocolate

Swiss chocolate is chocolate produced in Switzerland. While cacao beans and other ingredients such as sugar can originate from outside Switzerland, the actual production of the chocolate must take place in Switzerland. Switzerland's chocolates have earned an international reputation for high quality with many famous international chocolate brands.

Switzerland is particularly renowned for its milk chocolate. In 1875, a Swiss confectioner, Daniel Peter, developed the first solid milk chocolate using condensed milk, which had been invented by Henri Nestlé, who was Peter's neighbour in Vevey.

Swiss franc

The franc (German: Franken, French and Romansh: franc, Italian: franco; sign: Fr. or SFr.; code: CHF) is the currency and legal tender of Switzerland and Liechtenstein; it is also legal tender in the Italian exclave Campione d'Italia. The Swiss National Bank (SNB) issues banknotes and the federal mint Swissmint issues coins.

The smaller denomination, a hundredth of a franc, is a Rappen (Rp.) in German, centime (c.) in French, centesimo (ct.) in Italian, and rap (rp.) in Romansh. The ISO code of the currency used by banks and financial institutions is CHF, although Fr. is also widely used by businesses and advertisers; some use SFr. for Swiss Franc and to a lesser extent Fr.sv. The Latinate "CH" stands for Confoederatio Helvetica.

Given the different languages used in Switzerland, Latin is used for language-neutral inscriptions on its coins.

Tourism in Switzerland

Tourists are drawn to Switzerland's diverse landscape as well as activities. Most interesting are the Alpine climate and landscapes, in particular for skiing and mountaineering.

As of 2016, tourism accounted for an estimated 2.6% (CHF 16.8 billion) of Switzerland's gross domestic product, down from 2.6% (CHF 12.8 billion) in 2001.

Trade unions in Switzerland

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. The most important organization is the Swiss Trade Union Confederation (SGB or USS) with approximately 385,000 members and 16 individual trade unions.

Unia is the largest of these with 200,000 members. It merged with the Trade union for Construction and Industry (GBI), the Trade Union for Industry, Trade and Services (SMUV), the VHTL, and actions in 2004. The second largest confederation is Travail.Suisse, which was founded in 2002 in Bern and has approximately 170,000 members.

Vreneli

Vreneli is the informal name for a range of legal tender gold coins produced in Switzerland. The formal name is: Tête d'Helvetia (French), Helvetiakopf (German) or Helvetia Head (English). The coins were issued between 1897 and 1936, in 1947 and in 1949. All coins issued after 1936 are restrikes (legal tender ceased September 29, 1936).

Top 25 imports and exports for Switzerland for 2009[37]
Top 25 Imports into Switzerland for 2009
Ranking SITC4 Product Names (SITC) Value (USD) %
1 5417 Medicaments $12,609MM 8.1%
2 7810 Cars $7,173MM 4.6%
3 9310 Unclassified transactions $7,171MM 4.6%
4 8973 Precious jewellery $5,924MM 3.8%
5 6812 Unwrought metals of platinum $3,814MM 2.5%
6 5416 Glycosides & vaccines $3,597MM 2.3%
7 3510 Electric current $2,801MM 1.8%
8 5156 Heterocyclic compound; nucleic acids $2,432MM 1.6%
9 3330 Crude petroleum $2,126MM 1.4%
10 5148 Other nitrogen-function compounds $1,948MM 1.3%
11 8219 Furniture parts N.E.S. $1,755MM 1.1%
12 6672 Not mounted diamonds $1,670MM 1.1%
13 7721 Switchboards, relays & fuses $1,557MM 1.0%
14 8996 Orthopaedic appliances $1,551MM 1.0%
15 3414 petroleum gases $1,388MM 0.9%
16 8851 Watches $1,320MM 0.9%
17 8939 Miscellaneous articles of plastic $1,311MM 0.8%
18 8960 Works of art $1,273MM 0.8%
19 8720 Medical instruments N.E.S. $1,251MM 0.8%
20 5989 Chemical products $1,146MM 0.7%
21 7643 Television & radio transmitters $1,125MM 0.7%
22 7924 Aircraft of more than 15 tons $1,123MM 0.7%
23 8510 Footwear $1,108MM 0.7%
24 1121 Wine $1,028MM 0.7%
25 7284 Specialized industry machinery & parts N.E.S $1,026MM 0.7%
Top 25 exports from Switzerland for 2009
Ranking SITC4 Product Names (SITC) Value (USD) %
1 5417 Medicaments $26,059MM 15.0%
2 5416 Glycosides & vaccines $14,373MM 8.3%
3 8851 Watches $11,694MM 6.8%
4 8996 Orthopaedic appliances $5,714MM 3.3%
5 8973 Precious jewellery $4,824MM 2.8%
6 3510 Electric current $4,184MM 2.4%
7 5148 Other nitrogen-function compounds $4,030MM 2.3%
8 7721 Switchboards, relays & fuses $3,438MM 2.0%
9 7284 Specialized industry machinery & parts N.E.S $3,098MM 1.8%
10 6812 Unwrought metals of platinum $2,789MM 1.6%
11 5156 Heterocyclic compound; nucleic acids $2,684MM 1.5%
12 5147 Amide-function compounds, excluding urea $2,396MM 1.4%
13 7149 Parts of gas & reaction engines $2,214MM 1.3%
14 8720 Medical instruments N.E.S. $2,100MM 1.2%
15 5415 Bulk hormones $1,718MM 1.0%
16 5413 Antibiotics $1,631MM 0.9%
17 5514 Odoriferous substances $1,417MM 0.8%
18 6672 Not mounted diamonds $1,318MM 0.8%
19 1110 Non-alcoholic beverages N.E.S. $1,269MM 0.7%
20 8939 Miscellaneous articles of plastic $1,237MM 0.7%
21 9310 Unclassified transactions $1,232MM 0.7%
22 7452 Non-electrical machines parts N.E.S. $1,145MM 0.7%
23 8960 Works of art $1,057MM 0.6%
24 7492 Valves $1,054MM 0.6%
25 7416 Heating & cooling equipment N.E.S. $1,034MM 0.6%
Top 25 trading partners for Switzerland for 2009[37]
Top 25 Trading Partners Importing into Switzerland for 2009
Ranking Country Value (USD) %
1 Germany $48,530MM 28.0%
2 Italy $15,958MM 9.0%
3 France $14,311MM 8.1%
4 United States $10,083MM 5.7%
5 Netherlands $6,701MM 3.8%
6 Japan $6,698MM 3.8%
7 Austria $6,607MM 3.7%
8 United Kingdom $5,902MM 3.3%
9 China $4,589MM 2.6%
10 Peru $3,981MM 2.3%
11 Belgium $3,952MM 2.2%
12 Ireland $3,842MM 2.2%
13 United Arab Emirates $3,587MM 2.0%
14 Spain $3,536MM 2.0%
15 Thailand $3,155MM 1.8%
16 Zambia $2,027MM 1.1%
17 Brazil $1,978MM 1.1%
18 Viet Nam $1,971MM 1.1%
19 Russia $1,924MM 1.1%
20 South Africa $1,591MM 0.9%
21 Czech Republic $1,498MM 0.9%
22 Sweden $1,191MM 0.7%
23 Poland $1,055MM 0.6%
24 Hong Kong $1,054MM 0.6%
25 Argentina $974MM 0.6%
Top 25 trading partners exporting from Switzerland for 2009
Ranking Country Value (USD) %
1 Germany $39,238MM 21.0%
2 United States $16,260MM 8.6%
3 Italy $14,566MM 7.7%
4 France $13,610MM 7.2%
5 India $10,203MM 5.4%
6 Austria $8,050MM 4.3%
7 China $6,938MM 3.7%
8 United Kingdom $6,451MM 3.4%
9 Japan $6,274MM 3.3%
10 Hong Kong $4,666MM 2.5%
11 Belgium $3,686MM 2.0%
12 Spain $3,685MM 2.0%
13 Israel $3,277MM 1.7%
14 Canada $3,016MM 1.6%
15 United Arab Emirates $2,833MM 1.5%
16 Thailand $2,504MM 1.3%
17 Singapore $2,471MM 1.3%
18 Netherlands $2,358MM 1.3%
19 Saudi Arabia $2,317MM 1.2%
20 Brazil $2,040MM 1.1%
21 Turkey $2,012MM 1.1%
22 Australia $2,004MM 1.1%
23 Russia $1,986MM 1.1%
24 Korea, Rep. $1,661MM 0.9%
25 Poland $1,406MM 0.8%

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