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Economic Overview

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 202020212022 (e)2023 (e)2024 (e)
GDP (billions USD) 739.00799.80e807.42834.60878.42
GDP (Constant Prices, Annual % Change) -2.54.22.20.81.8
GDP per Capita (USD) 85e92929499
General Government Balance (in % of GDP) -2.3-0.5-0.20.30.4
General Government Gross Debt (in % of GDP) 43.342.140.339.137.5
Inflation Rate (%) -0.70.63.12.41.5
Unemployment Rate (% of the Labour Force) 3.23.02.22.42.5
Current Account (billions USD) 21.1875.5450.0653.4565.38
Current Account (in % of GDP) 2.99.46.26.47.4

Source: IMF – World Economic Outlook Database , October 2021

Note: (e) Estimated Data

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Switzerland is one of the most competitive economies in the world due to its strong added value services, its specialized industries and a motivated and highly skilled workforce of 4.9 million people. Agriculture represents 0.7% of GDP and employs 2.6% of the active population (World Bank, latest data available). The primary agricultural products are livestock and dairy products, though the country is also home to over 9,000 wineries. Swiss authorities grant numerous direct subsidies to farmers in order to meet strict ecological criteria, such as soil protection. The country has hardly any mineral resources. Despite the small size of the agricultural industry, organic farming has experienced considerable growth (4,902 organic farms, 15.3% of the total, according to the Federal Statistical Office), but with big cantonal differences.

Industry employs 20.3% of the workforce and constitutes 25.2% of GDP. Switzerland is renowned worldwide for the high quality of its manufactured products, which include watches, motors, generators, turbines and diverse high-technology products. The manufacturing sector alone is estimated to contribute 8.1% of GDP. The strong industry sector is driven by large exporting groups. Basel, in particular, is home to a very dynamic and powerful chemical and pharmaceutical industry. Electricity is generated chiefly from hydraulic and nuclear power, and hydroelectric resources provide almost two-thirds of the country's energy. Having suffered its worst year in history in 2020, the Swiss watchmaking industry recovered in 2021, on the back of strong demand from China and the U.S.

The service sector represents 71.3% of GDP and employs 77% of the workforce. Well-developed and globally competitive sectors, such as banking, insurance, freight and transport, have contributed to the development of international trade across Switzerland. The banking sector alone represents 9.7% of gross value added and is in moderately good shape despite considerable headwinds. Almost half of the EUR 7,280 billion assets currently managed by Swiss banks originated abroad. The system comprises four major banks, 24 cantonal banks, 39 stock exchange banks, one Raiffeisenbank and 59 regional and savings banks, for a total of 243 banks with 2,477 branches (European Banking Federation). Tourism, which adds significantly to the economy, helps to balance Switzerland's trade deficit. Nevertheless, the Covid-19 pandemic had a huge impact on the Swiss tourism industry due to travel restrictions worldwide, as revenue from international tourism fell by almost 48% to USD 10.3 billion (Federal Statistics Office).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 2.6 20.3 77.1
Value Added (in % of GDP) 0.6 24.6 71.9
Value Added (Annual % Change) -6.5 7.9 3.0

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Swiss Franc (CHF) - Average Annual Exchange Rate For 1 USD 0.990.980.981.000.94

Source: World Bank - Latest available data.

 

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Foreign Trade

The Swiss economy is extremely open to foreign trade, which represents 115.9% of the country’s GDP (World Bank – latest data available). Exports of goods and services account for nearly two-thirds of 5the country’s GDP. In 2020, the main exports were gems (22.5%), pharmaceuticals (14.9%), blood (12.4%), and clocks and watches (3.6%), while imports were led by gems and precious metals (30.3%), pharmaceuticals (8.9%), blood (4.3%), motor cars (3.5%), and jewellery (2.7% - Comtrade data).

In 2020, Switzerland's main clients were the United States (23%), Germany (15.4%), China (5.5%), the United Kingdom (5.3%), and France (5.2%). Its main suppliers were Germany (19.5%), Italy (8.2%), the United States (7.2%), China (6.1%), and France (5.9% - Comtrade data). The European Union is Switzerland's largest trade partner, accounting for two-thirds of its total foreign trade. Since 2002, the country has signed agreements with the EU regarding seven key trade sectors. Most of Switzerland's trade agreements have been signed through EFTA, although Switzerland is allowed to conclude FTAs outside EFTA, as was the case with Japan and China.

Switzerland has a structurally large trade surplus. Exports rely mostly on high-tech sectors, which are less dependent on the international economic situation than other industries. According to WTO data, in 2020, Switzerland's exports of goods amounted to USD 319.3 billion while imports stood at USD 292 billion (+1.7% and +5% compared to one year earlier, respectively). As with regard to services, Switzerland exported USD 113 billion (-12%), while it imported USD 113.8 billion (-6.9%). The country’s trade surplus was estimated at 8.8% of GDP in 2020 by the World Bank. According to preliminary figures from the Federal Customs Administration, in the first nine months of 2021, Swiss exports totalled CHF 182.6 billion whereas imports stood at CHF 147 billion.

 
Foreign Trade Values 20172018201920202021
Imports of Goods (million USD) 269,834279,528277,830291,981324,069
Exports of Goods (million USD) 299,603310,749313,934319,318380,194
Imports of Services (million USD) 103,250122,110122,240113,792142,347
Exports of Services (million USD) 120,236133,665129,365112,992134,785

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20172018201920202021
Foreign Trade (in % of GDP) 123.6124.4124.1122.2130.9
Trade Balance (million USD) 64,45572,51771,38863,482110,497
Trade Balance (Including Service) (million USD) 57,80470,98665,10144,25790,854
Imports of Goods and Services (Annual % Change) -0.40.80.3-3.25.0
Exports of Goods and Services (Annual % Change) -0.43.4-0.7-5.212.4
Imports of Goods and Services (in % of GDP) 57.357.057.257.959.5
Exports of Goods and Services (in % of GDP) 66.367.567.064.371.4

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20222023 (e)2024 (e)2025 (e)2026 (e)
Volume of exports of goods and services (Annual % change) 0.5-0.14.73.84.7
Volume of imports of goods and services (Annual % change) 1.50.54.54.54.5

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Switzerland is a member of the following international economic organisations: IMF, European Free Trade Association (EFTA), ICC, Latin American Integration Association (LAIA) (observer), G-10, WTO, OECD, among others. For the full list of economic and other international organisations in which participates Switzerland click here. International organisation membership of Switzerland is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by Switzerland can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)
2021
United States 16.5%
Germany 14.5%
China 8.7%
India 8.3%
Italy 5.3%
See More Countries 46.6%
Main Suppliers
(% of Imports)
2021
Germany 19.3%
United Kingdom 11.2%
United States 7.5%
Italy 7.4%
China 6.1%
See More Countries 48.4%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President of the Swiss Confederation: Ignazio CASSIS (since 1 January 2022)
Vice President: Alain BERSET (since 1 January 2022)
Next Election Dates
President: December 2022
National Council: October 2023
Council of States: each canton decides its own election dates, but these usually take place at the same time as those of the National Council.
Current Political Context
For decades, the seven-seat Federal Council has been dominated by the same four main parties: the SVP, the Social Democrats, the FDP liberals and the CVP. The Green Party has been gaining momentum and overtook the CVP getting for the first time a spot in the coalition that governs Switzerland (marking the largest leap by a political party in Swiss politics since 1919).
During 2021 much of the political scene was dominated by the fight against the COVID-19 pandemic. Furthermore, after seven years of negotiations, Switzerland decided to end the talks with the EU without reaching a final agreement on a treaty that would replace the 120 bilateral deals currently enforced with one framework deal. The Swiss government has highlighted four issues: EU citizens’ access to Swiss labour markets, the protection of salary levels, access to welfare, and state aid rules.
Ignazio Cassis of the FDP-The Liberals Party will be presiding the Federal Council in 2022.
Main Political Parties
The main parties in the Country are:

- Swiss People's Party (SVP/UDC): populist right-wing group; strong base in German-speaking areas of Switzerland
- Social Democratic Party (SP/PS): centre-left
- Free Democratic Party (FDP/PRD/PLR): centre-right
- The Centre : centre-right (formed from the merger of the Christian Democratic Party and the Conservative Democratic Party)
- Green Party (PES): environmentalist and pacifist party
- Green Liberals (GL): left-wing environmentalist group
- Evangelical People's Party (EVP): centre-left
- Ticino League (Lega): right wing, regionalism
- Geneva Citizens Movement (MCG): right wing
- Swiss Party of Labour (PST-POP): far-left, communist
- Christian Social Party (CSP/ PCS): centre-left
-Federal Democratic Union (EDU/UDF): right wing

Executive Power
The President is both the chief of the state and head of the government. The post is purely ceremonial and by tradition rotates annually among the seven members of the Federal Council. The Federal Council is a seven-member executive council (cabinet) that heads the executive branch, with its members being elected by country’s parliament for a four-year term. Under the Constitution of Switzerland the make-up of the government is not determined by parliamentary majority but in accordance with a four-party power-sharing agreement (established in 1959) and known as the 'magic formula'.
Legislative Power
The legislature in Switzerland is bicameral. The parliament, called Federal Assembly, consists of the Council of States (upper house) and the National Council (lower house). The former is comprised of 46 seats, with two members selected from each of the 20 cantons (states/provinces) and one from each of the six half-canton. The National Council is comprised of 200 seats, with its members elected by popular vote on the basis of proportional representation. Members of both the Council of States and the National Council serve four year terms. The executive branch of government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. The federal legislative power is vested in both the government and the parliament.
 

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COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Switzerland, please visit the dedicated page on the website of the Swiss Federal Office of Public Health (FOPH). Additional information is available on the portal SwissInfo.
For the international outlook you can consult the latest
situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures

Latest information on the public health situation, relevant advice and COVID-19 safety measures are available on the website of the Swiss Federal Office of Public Health (FOPH). Further details and daily updates can be accessed on the portal SwissInfo.

Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the portal of the .
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Switzerland on the
International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

For information on the economic recovery scheme put in place by the Swiss government to address the impact of the COVID-19 pandemic refer to the website of the (in French, German or Italian). Further information can be accessed on the website of the Federal Department of Finance and on the portal Covid19.easygov.swiss (in French, German or Italian).

For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Swiss government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Switzerland in the IMF’s Policy Tracker platform.

Support plan for businesses

For the information on the local business support scheme established by the Swiss government to help businesses to deal with the economic impacts of the COVID-19 epidemic on their activity, please consult the website of the (in French, German or Italian). Further info can be found on the government’s
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document.

You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

To source information regarding the support plan for exporters put in place in Switzerland, visit the website of the Further information can be accessed on the portal Switzerland Global Enterprise (S-GE).

 

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