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Economic and political overview

Economic Overview

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 healthcare systems are among the highest in Europe. In 2024, real GDP grew by an estimated 1.3%, up from 0.7% in 2023, driven by a strong rebound in private consumption. Export growth was robust, supported by significant recoveries in the chemical and pharmaceutical sectors. Overall growth was mainly driven by the expanding chemical-pharmaceutical industry, while the rest of the manufacturing sector contracted and services experienced below-average growth. GDP is projected to grow by 1.3% in 2025, before accelerating to 1.8% in 2026 (IMF), on the back of improving domestic demand, lower inflation, better financing conditions, and rising employment. However, export growth faces risks from weak external demand, particularly in Germany, and a strong domestic currency.

In 2024, the general government balance improved to 0.7% of GDP, mainly due to strong performance by social security funds, supported by a stable economic environment. The surplus is expected to narrow to 0.4% of GDP in 2025, driven by higher defence spending and a deferred capital injection for the state rail operator, and further to 0.2% in 2026 as costs from the 13th-month pension, approved by public initiative in March 2024, take effect (data IMF). Public finance management remains anchored by the federal debt brake rule, which mandates cyclically adjusted fiscal balances at the federal level each year. Switzerland’s public finances are a key rating strength, with general government debt projected at 31.9% of GDP by the end of 2024. Debt levels are expected to decline to 29.8% of GDP by 2026, supported by nominal economic growth and stable primary surpluses. All public debt is denominated in local currency, with an average maturity of 10.5 years. As per the latest governmental figures, average annual inflation was 1.1% in 2024 (down from 2.1% one year earlier), driven mainly by higher housing rental and electricity prices. In contrast, prices for medicines, gas, and second-hand cars decreased. Domestic product prices rose by 1.9%, while imported product prices fell by 1.5%. The IMF forecasts inflation at 1% this year and in 2026. 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 have been required to share their clients' information with foreign tax authorities.

Unemployment remained low in 2024 - at 2.4%, although slowly rising from a historic low - and should be stable in the near term. Boosting participation in the labour market, particularly among mothers and older workers, would help reduce labour shortages. Overall, Switzerland is one of the wealthiest countries in the world, with a GDP per capita (PPP) estimated at USD 98,145 in 2024 by the IMF. Nevertheless, according to the latest data available from the Federal Statistical Office, 8.2% of the Swiss population is affected by income poverty.

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 894.81942.27999.601,045.771,085.66
GDP (Constant Prices, Annual % Change) 0.71.31.31.81.2
GDP per Capita (USD) 101,510106,098111,716116,005119,534
General Government Balance (in % of GDP) 0.20.70.40.20.2
General Government Gross Debt (in % of GDP) 33.331.930.829.829.0
Inflation Rate (%) 2.11.31.01.01.0
Unemployment Rate (% of the Labour Force) 2.02.42.52.52.5
Current Account (billions USD) 61.7777.3476.2483.8582.95
Current Account (in % of GDP) 6.98.27.68.07.6

Source: IMF – World Economic Outlook Database , October 2021

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 5 million people. Agriculture only represents 0.6% of GDP and employs 2% 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 (7,896 organic farms, 16.5% of the total, according to the Federal Statistical Office), but with big cantonal differences. Official figures estimated that, in 2024, Swiss agriculture generated a gross value added of CHF 4.6 billion, an increase of 3.4% compared with the previous year.

Industry employs 20% of the workforce and constitutes 24.9% 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 18% 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. Data by the Federal Statistical Office show that as of Q3/2024, the total output in the secondary sector increased by 3.3% year-on-year, while turnover grew by 5.5%.

The service sector represents 71.9% of GDP and employs 78% 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. Insurance firms and banks play a vital role in the Swiss economy, contributing roughly 9% to the GDP. The financial sector adds approximately CHF 69 billion in value and supports a workforce of about 218,000 full-time equivalent employees (official governmental data). There are 236 banks in Switzerland. In 2022, UBS and Credit Suisse contributed 40% to the combined annual net turnover of Swiss banks. By 2023, UBS had acquired Credit Suisse. The remaining 60% of turnover primarily came from various sources, including the 24 cantonal banks, international banks, Raiffeisen banks, stock exchange banks, regional banks, savings banks, and private banks. Tourism, which adds significantly to the economy, helps to balance Switzerland's trade deficit: hotel occupancy in Switzerland hit a record 24.4 million overnight stays from May to October 2024, up 1.6% year-on-year, driven by foreign demand. This is after visitors to Switzerland generated income totalling CHF 18.4 billion (around USD 20.5 billion) in 2023, according to FSO.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 1.9 19.9 78.2
Value Added (in % of GDP) 0.6 24.9 71.9
Value Added (Annual % Change) -0.9 -1.7 1.8

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 138% of the country’s GDP (World Bank – latest data available). According to official figures from the Federal Statistical Institute, in 2023, exports were led by chemical and pharmaceutical products (49.4%), machines and electronics (12%), watches (9.8%), precision instruments (6.5%), and metals (5.3%). As per imports, chemical and pharmaceutical products were the main category (30.7%), followed by machines, appliances, electronics (15.6%), vehicles (9.5%), metals (7.1%), and energy sources (5.8%).

At the country level, the United States absorbed 17.8% of Swiss exports, ahead of Germany (15.5%), Italy (7.7%), France (5.7%), China (5.6%), and Slovenia (5.2%). On the other hand, Germany (24.9%), Italy (10.2%), France (8%), China (7.9%), the U.S. (6.4%), and Slovenia (5.4%) were Switzerland's principal procurement markets in 2023. Overall, Europe accounted for 55% of total exports and 72% of imports (Federal Statistical Office data).

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 2023, Switzerland's exports of goods amounted to USD 420.1 billion while imports stood at USD 364.1 billion (+4.8% and +1.9% compared to one year earlier, respectively). As with regard to services, Switzerland exported USD 170 billion (+12% y-o-y), while it imported USD 191.5 billion (+19.2%). The country’s trade surplus was estimated at 12.4% of GDP in 2023 by the World Bank (from 13.7% one year earlier). According to preliminary figures from the Federal Customs Administration, in 2024, exports rose by 3.2% to CHF 282.9 billion, while imports dropped 1.6% to CHF 222.3 billion, leading to a record trade balance surplus of CHF 60.6 billion.

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 277,830291,981324,069357,115364,098
Exports of Goods (million USD) 313,934319,318380,194400,693420,170
Imports of Services (million USD) 141,919139,896158,899160,673191,523
Exports of Services (million USD) 135,632120,582140,510151,696169,979

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

Foreign Trade Indicators 20192020202120222023
Foreign Trade (in % of GDP) 124.1121.8130.3140.2138.2
Trade Balance (million USD) 71,38863,482116,121120,938124,944
Trade Balance (Including Service) (million USD) 65,10144,16897,331110,73697,824
Imports of Goods and Services (Annual % Change) 0.3-3.25.76.23.5
Exports of Goods and Services (Annual % Change) -0.7-5.213.85.92.5
Imports of Goods and Services (in % of GDP) 57.257.759.063.262.9
Exports of Goods and Services (in % of GDP) 67.064.171.376.975.3

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20242025 (e)2026 (e)2027 (e)2028 (e)
Volume of exports of goods and services (Annual % change) 2.21.84.23.44.2
Volume of imports of goods and services (Annual % change) -0.02.04.04.04.0

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)		 2023
United States 15.0%
Germany 12.2%
China 10.8%
Italy 6.4%
France 4.8%
See More Countries 50.9%
Main Suppliers
(% of Imports)		 2023
Germany 18.1%
United States 9.0%
Italy 7.8%
France 5.9%
China 5.6%
See More Countries 53.5%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President of the Swiss Confederation: Karin KELLER-SUTTER (since 1 January 2025)
Vice President: Karin KELLER-SUTTER (since 1 January 2025)
Next Election Dates
President: December 2025
National Council: October 2027
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
Switzerland's political and legal environment is widely based on consensus-building. 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. In October 2023, voters elected a new parliament for the 2023-2027 legislative period. Compared to the previous election, the People’s Party gained nine seats (for a total of 62) in the House of Representatives, the Social Democrats gained two (41), and the Centre Party gained one (29). The Radical-Liberals obtained 28, the Greens 23, and the Liberal Greens 10. In the 46-seat Senate, the Centre Party and the Radical-Liberals have won the most seats. In 2025, Karin Keller-Sutter, a native of the St. Gallen canton, will be the president of the Swiss Confederation. Guy Parmelin will serve as the Federal Council's vice president in 2025.
In 2024, Swiss voters took part in several referendums that addressed important national issues. They rejected a plan to raise the retirement age on March 3 but accepted an idea for the 13th OASI pension payment. While measures on health insurance rates and immunizations failed, a plan to increase renewable energy was approved on June 9. A biodiversity project and a reform for occupational pensions were rejected in the ballot on September 22. Ultimately, the government suffered its third consecutive defeat at the polls on November 24, when voters rejected proposals to extend the motorway network.
Concerning foreign and defence policy, in August, a report by Swiss experts commissioned by the Swiss Defense Ministry recommended adapting the country's neutrality policy by strengthening ties with NATO, particularly in areas like digital and hybrid warfare, without pursuing full membership. This proposal sparked significant debate regarding the future of Swiss neutrality.
Main Political Parties
The main parties represented in the parliament 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, advocates for social justice, equality, and sustainable development
- The Liberals (FDP/PRD/PLR): centre-right, supports economic liberalism
- 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 Liberal Party (GL): left-wing environmentalist group
- Evangelical People's Party (EVP): centre-left
- Federal Democratic Union (EDU/UDF): right-wing
- Swiss Party of Labour (PST/POP): far-left, communist
- Ticino League (Lega): right wing, regionalism
- Geneva Citizens Movement (MCG): right wing.

Executive Power
The President of Switzerland holds a ceremonial role, chairing the Federal Council and representing the country at official functions, but does not serve as a chief of state or head of government in the traditional sense. The position rotates annually by law among the seven members of the Federal Council, Switzerland's collective executive body. The Federal Council, elected by the parliament for a four-year term, governs jointly, with no single member holding individual executive authority. Under Switzerland's constitution, the composition of the Federal Council is not determined by a parliamentary majority but reflects a longstanding four-party power-sharing arrangement established in 1959, commonly 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. Unlike parliamentary systems, the executive (Federal Council) is not dependent on parliamentary confidence and cannot be dissolved by a vote of no confidence. The Federal Council operates independently of the Federal Assembly, and there is no mechanism for dissolving the government mid-term. The federal legislative power is vested in both the government and the parliament.
 

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