Economy

Economy

The Omega Speedmaster, a Swiss-made watch worn on the moon during the Apollo missions. In terms of value, Switzerland is responsible for half of the world production of watches.

Switzerland has a stable, modern and one of the most capitalist economies in the world. It has the 2nd highest European rating in the Index of Economic Freedom 2010, while also providing large coverage through public services. The nominal per capita GDP is higher than those of the larger western European economies and Japan, ranking 6th behind Luxembourg, Norway, Qatar, Iceland and Ireland. The Swiss franc remains one of the world's strongest currencies with the lowest inflation rate.

The Greater Zürich Area, home to 1.5 million inhabitants and 150,000 companies, has taken top position in some life quality surveys.

The Engadin Valley. Tourism constitutes an important revenue for the less industrialised alpine regions.

If adjusted for purchasing power parity, Switzerland ranks 15th in the world for GDP per capita. The World Economic Forum's Global Competitiveness Report currently ranks Switzerland's economy as the most competitive in the world. For much of the 20th century, Switzerland was the wealthiest country in Europe by a considerable margin. In 2005 the median household income in Switzerland was an estimated 95,000 CHF, the equivalent of roughly 90,000 USD (as of December 2009) in nominal terms.

Switzerland is home to several large multinational corporations. The largest Swiss companies by revenue are Glencore, Nestlé, Novartis, Hoffmann-La Roche, ABB and Adecco. Also notable are UBS AG, Zurich Financial Services, Credit Suisse, Swiss Re, and The Swatch Group. Switzerland is ranked as having one of the most powerful economies in the world. Chemicals, health and pharmaceutical, measuring instruments, musical instruments, real estate, banking and insurance, tourism, and international organisations are important industries in Switzerland. The largest exported goods are chemicals (34% of exported goods), machines/electronics (20.9%), and precision instruments/watches (16.9%). Exported services amount to a third of exported goods.

Around 3.8 million people work in Switzerland. Switzerland has a more flexible job market than neighboring countries and the unemployment rate is very low. Unemployment rate increased from a low of 1.7% in June 2000 to a peak of 4.4%, as of December 2009. Population growth from net immigration is quite high, at 0.52% of population in 2004. Foreign citizen population is 21.8% as of 2004, about the same as in Australia. GDP per hour worked is the world's 17th highest, at 27.44 international dollars in 2006.

Switzerland has an overwhelmingly private sector economy and low tax rates by Western standards; overall taxation is one of the smallest of developed countries. Switzerland is an easy place to do business; Switzerland ranks 21st of 178 countries in the Ease of Doing Business Index. The slow growth Switzerland experienced in the 1990s and the early 2000s has brought greater support for economic reforms and harmonisation with the European Union. According to Credit Suisse, only about 37% of residents own their own homes, one of the lowest rates of home ownership in Europe. Housing and food price levels were 171% and 145% of the EU-25 index in 2007, compared to 113% and 104% in Germany.

Agricultural protectionism—a rare exception to Switzerland's free trade policies—has contributed to high food prices. Product market liberalisation is lagging behind many EU countries according to the OECD. Nevertheless, domestic purchasing power is one of the best in the world. Apart from agriculture, economic and trade barriers between the European Union and Switzerland are minimal and Switzerland has free trade agreements worldwide. Switzerland is a member of the European Free Trade Association (EFTA).