Ensuring resilient and sustainable growth
Bern
14 March 2024
OECD ECONOMIC SURVEY OF SWITZERLAND
@OECD @OECDeconomy
oe.cd/switzerland
The Swiss economy has been resilient
Source: OECD Economic Outlook database. Gross domestic product Volume, 2019 fourth quarter = 100 2019 2020 2021 2022 2023 85 90 95 100 105 110 85 90 95 100 105 110 Switzerland OECD Europe OECD
Inflation is coming down but pressures remain
Source: Federal Statistical Office. Inflation Year-on-year % change -2 -1 0 1 2 3 4 -2 -1 0 1 2 3 4 2018 2019 2020 2021 2022 2023 2024 Headline inflation Private services
The labour market is tight
Note: The vacancy rate refers to the share of vacancies in the total number of jobs, which is the sum of occupied jobs and vacancies.
Source: OECD Labour Force Statistics database; Federal Statistical Office, Job statistics.
Unemployment rate and job vacancy rate % 0,7 1,0 1,3 1,6 1,9 2,2 2,5 3,5 4 4,5 5 5,5 6 6,5 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 % of jobs % of labour force Unemployment rate (left scale) Job vacancy rate (right scale)
Growth will be subdued in 2024
Real GDP growth, % 2023 2024 2025 Headline inflation, % 1.4 0.9 0.8 1.4 1.9 2.1 Unemployment rate, % 4.4 4.4 4.0 Source: OECD.
Ensuring low inflation and fiscal sustainability
Monetary policy should remain restrictive
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Source: Swiss National Bank. Policy rate % -1,0 -0,5 0,0 0,5 1,0 1,5 2,0 2,5 3,0 -1,0 -0,5 0,0 0,5 1,0 1,5 2,0 2,5 3,0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
The fiscal stance should remain broadly neutral
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% of GDP -4 -3 -2 -1 0 1 2 3 4 -4 -3 -2 -1 0 1 2 3 4 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Source: OECD Economic Outlook database. General government fiscal balance
Fiscal pressures from ageing must be addressed
Note: The pension reform scenario entails the following: the retirement age gradually rises to 67 in 2034, and by two thirds of the expected gain in life expectancy thereafter. The broad reform scenario entails the pension reform, the female prime-age (25-54) employment rate converging to that of men by 2050 and net immigration rising from 45 000 annually to 75 000 by 2030.
Source: OECD Long-Term Economic Model, OECD calculations.
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Government gross debt % of GDP 30 40 50 60 30 40 50 60 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 Baseline Pension reform scenario Broad reform scenario
Tackling
labour and skills shortages
Labour shortages are becoming persistent
Qualified personnel found with difficulty or not found at all
of companies actively
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Federal Statistical Office, Job statistics (JOBSTAT). 10 20 30 40 50 60 70 10 20 30 40 50 60 70 2004 2007 2010 2013 2016 2019 2022 Total Manufacturing Services
Source:
Share
%
recruiting, in
Lowering childcare costs could increase female workforce participation
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Source: OECD Tax and Benefit Model. Gross fees for two children attending a typical childcare centre % of average earnings 0 10 20 30 40 50 60 70 0 10 20 30 40 50 60 70 DEU AUT ISL LVA HUN LTU SWE ESP CZE EST NOR POL SVK DNK FIN ISR KOR BEL FRA OECD JPN PRT USA IRL CAN ITA LUX SVN AUS GRC GBR CHE NLD
Introducing more flexibility to combine retirement and work can encourage longer working lives
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Source: OECD Employment and Labour Market Statistics database. Employment rate % of respective population, 2022 0 20 40 60 80 100 0 20 40 60 80 100 Men Women Men Women Men Women Switzerland OECD countries 55 to 59 60 to 64 65 to 69
Allowing international students from non-EU countries more time to find a job would ease shortages
Postgraduate extension schemes
Allowed duration of stay, typically to search for a job following graduation, in months, 2022
Note. For EU countries, Switzerland and Norway, duration of stay refers to non-EU countries. Source: OECD (2022), International Migration Outlook 2022.
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0 5 10 15 20 25 30 0 5 10 15 20 25 30 AUS FIN GBR KOR DEU OECD AUT BEL CHL ESP FRA GRC IRL ITA JPN LTU NLD NOR NZL PRT SWE TUR USA CZE EST HUN LUX LVA POL SVK SVN CAN CHE DNK
Strengthening economic resilience
Trade restrictions pose challenges for Switzerland
World Trade Organisation November 2022 Report; OECD Economic Outlook database. Global import-restrictive measures on goods % of world merchandise imports Foreign trade openness Sum of exports and imports of goods and services % of GDP, 2022 0 1 2 3 4 5 6 7 8 9 10 2010 2012 2014 2016 2018 2020 2022e 60 80 100 120 140 160 Switzerland OECD average OECD median
Source:
Lowering trade costs in agriculture and services could boost economic resilience
Notes: The effective trade costs are estimates of the costs involved with international trade relative to domestic activity, averaged across ISIC Rev. 4 subsectors in 2018. The trade costs are expressed as ad-valorem equivalents, in logarithms. This is the additional cost (in %) that is associated with trade between countries relative to within countries. OECD is a simple average of OECD countries.
Source: World Trade Organization.
In logarithms
Trade costs
1 1,2 1,4 1,6 1,8 2 1 1,2 1,4 1,6 1,8 2 Agriculture Services Manufacturing Switzerland OECD Austria, Germany, France and Italy
Improved regulation would strengthen competition
of Product
Regulation (PMR) Index scale of 0-6
0 1 2 3 4 0 1 2 3 4 Overall indicator Administrative and regulatory burden Switzerland OECD
OECD Indicators
Market
from least to most restrictive, 2018 Source: OECD (2018), Product Market Regulation Database.
Accelerating emissions reductions
Source: Green Growth Indicators, OECD Environment Statistics (database).
Emissions per unit of GDP are the lowest in the OECD
Greenhouse gas emissions Per unit of GDP, kg/USD (2015 PPP), 2021 0 0,1 0,2 0,3 0,4 0,5 0 0,1 0,2 0,3 0,4 0,5 CHE SWE IRL LUX NOR DNK FRA GBR AUT PRT ESP NLD ITA DEU FIN LVA LTU BEL HUN SVN TUR JPN SVK ISL OECD EST GRC CZE USA POL NZL CAN AUS
Emissions reductions must accelerate across sectors
Note : Agriculture and waste also includes categories not classified elsewhere.
Source: Federal Office for the Environment (FOEN), 2023.
Greenhouse gas emissions by sector Tonnes of CO2 equivalent, millions 0 3 6 9 12 15 18 0 3 6 9 12 15 18 1990 2000 2010 2021 2030 2040 2050 Transport Buildings Industry Agriculture and waste
Expanding renewables would allow ramping up electrification and cutting emissions
Source: Federal Office for the Environment (FOEN), Energy perspectives 2050+. Electricity production Net-zero emissions basis scenario, TWh -20 0 20 40 60 80 100 -20 0 20 40 60 80 100 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 Hydro Nuclear power plants Fossil power plants Renewables Net imports
Main messages
Maintain a tight monetary policy and broadly neutral fiscal stance in the near term. Long-term fiscal sustainability pressures call for pension reform.
Boost labour market participation to raise growth. Longer working lives and lowering childcare costs will be important to promote workforce participation of older workers and women.
Deepen ties with existing trading partners, notably the European Union, and extend the network of free trade agreements. Reduce barriers to cross-border trade and lower the administrative burden to spur competition and productivity growth.
Strengthen incentives and speed up approval processes to lower emissions, notably in the transportation and building sectors.
Green Labour & skills Macro policy Resilience
For more information
Disclaimers:
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