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Switzerland vs. Germany

Economy

SwitzerlandGermany
Economy - overview

Switzerland, a country that espouses neutrality, is a prosperous and modern market economy with low unemployment, a highly skilled labor force, and a per capita GDP among the highest in the world. Switzerland's economy benefits from a highly developed service sector, led by financial services, and a manufacturing industry that specializes in high-technology, knowledge-based production. Its economic and political stability, transparent legal system, exceptional infrastructure, efficient capital markets, and low corporate tax rates also make Switzerland one of the world's most competitive economies.

The Swiss have brought their economic practices largely into conformity with the EU's to gain access to the Union’s Single Market and enhance the country’s international competitiveness. Some trade protectionism remains, however, particularly for its small agricultural sector. The fate of the Swiss economy is tightly linked to that of its neighbors in the euro zone, which purchases half of Swiss exports. The global financial crisis of 2008 and resulting economic downturn in 2009 stalled demand for Swiss exports and put Switzerland into a recession. During this period, the Swiss National Bank (SNB) implemented a zero-interest rate policy to boost the economy, as well as to prevent appreciation of the franc, and Switzerland's economy began to recover in 2010.

The sovereign debt crises unfolding in neighboring euro-zone countries, however, coupled with economic instability in Russia and other Eastern European economies drove up demand for the Swiss franc by investors seeking a safehaven currency. In January 2015, the SNB abandoned the Swiss franc’s peg to the euro, roiling global currency markets and making active SNB intervention a necessary hallmark of present-day Swiss monetary policy. The independent SNB has upheld its zero interest rate policy and conducted major market interventions to prevent further appreciation of the Swiss franc, but parliamentarians have urged it to do more to weaken the currency. The franc's strength has made Swiss exports less competitive and weakened the country's growth outlook; GDP growth fell below 2% per year from 2011 through 2017.

In recent years, Switzerland has responded to increasing pressure from neighboring countries and trading partners to reform its banking secrecy laws, by agreeing to conform to OECD regulations on administrative assistance in tax matters, including tax evasion. The Swiss Government has also renegotiated its double taxation agreements with numerous countries, including the US, to incorporate OECD standards.

The German economy - the fifth largest economy in the world in PPP terms and Europe's largest - is a leading exporter of machinery, vehicles, chemicals, and household equipment. Germany benefits from a highly skilled labor force, but, like its Western European neighbors, faces significant demographic challenges to sustained long-term growth. Low fertility rates and a large increase in net immigration are increasing pressure on the country's social welfare system and necessitate structural reforms.

Reforms launched by the government of Chancellor Gerhard SCHROEDER (1998-2005), deemed necessary to address chronically high unemployment and low average growth, contributed to strong economic growth and falling unemployment. These advances, as well as a government subsidized, reduced working hour scheme, help explain the relatively modest increase in unemployment during the 2008-09 recession - the deepest since World War II. The German Government introduced a minimum wage in 2015 that increased to $9.79 (8.84 euros) in January 2017.

Stimulus and stabilization efforts initiated in 2008 and 2009 and tax cuts introduced in Chancellor Angela MERKEL's second term increased Germany's total budget deficit - including federal, state, and municipal - to 4.1% in 2010, but slower spending and higher tax revenues reduced the deficit to 0.8% in 2011 and in 2017 Germany reached a budget surplus of 0.7%. A constitutional amendment approved in 2009 limits the federal government to structural deficits of no more than 0.35% of GDP per annum as of 2016, though the target was already reached in 2012.

Following the March 2011 Fukushima nuclear disaster, Chancellor Angela MERKEL announced in May 2011 that eight of the country's 17 nuclear reactors would be shut down immediately and the remaining plants would close by 2022. Germany plans to replace nuclear power largely with renewable energy, which accounted for 29.5% of gross electricity consumption in 2016, up from 9% in 2000. Before the shutdown of the eight reactors, Germany relied on nuclear power for 23% of its electricity generating capacity and 46% of its base-load electricity production.

The German economy suffers from low levels of investment, and a government plan to invest 15 billion euros during 2016-18, largely in infrastructure, is intended to spur needed private investment. Domestic consumption, investment, and exports are likely to drive German GDP growth in 2018, and the country’s budget and trade surpluses are likely to remain high.

GDP (purchasing power parity)
$523.1 billion (2017 est.)
$514.5 billion (2016 est.)
$506.5 billion (2015 est.)

note: data are in 2017 dollars

$4.199 trillion (2017 est.)
$4.099 trillion (2016 est.)
$4.012 trillion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
1.11% (2019 est.)
3.04% (2018 est.)
1.65% (2017 est.)
0.59% (2019 est.)
1.3% (2018 est.)
2.91% (2017 est.)
GDP - per capita (PPP)
$62,100 (2017 est.)
$61,800 (2016 est.)
$61,500 (2015 est.)

note: data are in 2017 dollars

$50,800 (2017 est.)
$49,800 (2016 est.)
$49,100 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 0.7% (2017 est.)
industry: 25.6% (2017 est.)
services: 73.7% (2017 est.)
agriculture: 0.7% (2017 est.)
industry: 30.7% (2017 est.)
services: 68.6% (2017 est.)
Population below poverty line
6.6% (2014 est.)
16.7% (2015 est.)
Household income or consumption by percentage share
lowest 10%: 7.5%
highest 10%: 19% (2007)
lowest 10%: 3.6%
highest 10%: 24% (2000)
Inflation rate (consumer prices)
0.5% (2017 est.)
-0.4% (2016 est.)
1.7% (2017 est.)
0.4% (2016 est.)
Labor force
5.067 million (2020 est.)
44.585 million (2020 est.)
Labor force - by occupation
agriculture: 3.3%
industry: 19.8%
services: 76.9% (2015)
agriculture: 1.4%
industry: 24.2%
services: 74.3% (2016)
Unemployment rate
2.31% (2019 est.)
2.55% (2018 est.)
4.98% (2019 est.)
5.19% (2018 est.)
Distribution of family income - Gini index
29.5 (2014 est.)
33.1 (1992)
27 (2006)
30 (1994)
Budget
revenues: 242.1 billion (2017 est.)
expenditures: 234.4 billion (2017 est.)

note: includes federal, cantonal, and municipal budgets

revenues: 1.665 trillion (2017 est.)
expenditures: 1.619 trillion (2017 est.)
Industries
machinery, chemicals, watches, textiles, precision instruments, tourism, banking, insurance, pharmaceuticals
among the world's largest and most technologically advanced producers of iron, steel, coal, cement, chemicals, machinery, vehicles, machine tools, electronics, automobiles, food and beverages, shipbuilding, textiles
Industrial production growth rate
3.4% (2017 est.)
3.3% (2017 est.)
Agriculture - products
grains, fruits, vegetables; meat, eggs, dairy products
potatoes, wheat, barley, sugar beets, fruit, cabbages; milk products; cattle, pigs, poultry
Exports
$313.5 billion (2017 est.)
$318.1 billion (2016 est.)

note: trade data exclude trade with Switzerland

$1.434 trillion (2017 est.)
$1.322 trillion (2016 est.)
Exports - commodities
machinery, chemicals, metals, watches, agricultural products
motor vehicles, machinery, chemicals, computer and electronic products, electrical equipment, pharmaceuticals, metals, transport equipment, foodstuffs, textiles, rubber and plastic products
Exports - partners
Germany 15.2%, US 12.3%, China 8.2%, India 6.7%, France 5.7%, UK 5.7%, Hong Kong 5.4%, Italy 5.3% (2017)
US 8.8%, France 8.2%, China 6.8%, Netherlands 6.7%, UK 6.6%, Italy 5.1%, Austria 4.9%, Poland 4.7%, Switzerland 4.2% (2017)
Imports
$264.5 billion (2017 est.)
$266.3 billion (2016 est.)
$1.135 trillion (2017 est.)
$1.022 trillion (2016 est.)
Imports - commodities
machinery, chemicals, vehicles, metals; agricultural products, textiles
machinery, data processing equipment, vehicles, chemicals, oil and gas, metals, electric equipment, pharmaceuticals, foodstuffs, agricultural products
Imports - partners
Germany 20.9%, US 7.9%, Italy 7.6%, UK 7.3%, France 6.8%, China 5% (2017)
Netherlands 13.8%, China 7%, France 6.6%, Belgium 5.9%, Italy 5.4%, Poland 5.4%, Czechia 4.8%, US 4.5%, Austria 4.3%, Switzerland 4.2% (2017)
Debt - external
$1.664 trillion (31 March 2016 est.)
$1.663 trillion (31 March 2015 est.)
$5.326 trillion (31 March 2016 est.)
$5.21 trillion (31 March 2015 est.)
Exchange rates
Swiss francs (CHF) per US dollar -
0.9875 (2017 est.)
0.9852 (2016 est.)
0.9852 (2015 est.)
0.9627 (2014 est.)
0.9152 (2013 est.)
euros (EUR) per US dollar -
0.885 (2017 est.)
0.903 (2016 est.)
0.9214 (2015 est.)
0.885 (2014 est.)
0.7634 (2013 est.)
Fiscal year
calendar year
calendar year
Public debt
41.8% of GDP (2017 est.)
41.8% of GDP (2016 est.)

note: 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

63.9% of GDP (2017 est.)
67.9% of GDP (2016 est.)

note: general government gross debt is defined in the Maastricht Treaty as consolidated general government gross debt at nominal value, outstanding at the end of the year in the following categories of government liabilities (as defined in ESA95): currency and deposits (AF.2), securities other than shares excluding financial derivatives (AF.3, excluding AF.34), and loans (AF.4); the general government sector comprises the sub-sectors of central government, state government, local government and social security funds; the series are presented as a percentage of GDP and in millions of euros; GDP used as a denominator is the gross domestic product at current market prices; data expressed in national currency are converted into euro using end-of-year exchange rates provided by the European Central Bank

Reserves of foreign exchange and gold
$811.2 billion (31 December 2017 est.)
$679.3 billion (31 December 2016 est.)
$200.1 billion (31 December 2017 est.)
$173.7 billion (31 December 2015 est.)
Current Account Balance
$79.937 billion (2019 est.)
$63.273 billion (2018 est.)
$280.238 billion (2019 est.)
$297.434 billion (2018 est.)
GDP (official exchange rate)
$679 billion (2017 est.)
$3.701 trillion (2017 est.)
Stock of direct foreign investment - at home
$1.489 trillion (31 December 2017 est.)
$1.217 trillion (31 December 2016 est.)
$1.653 trillion (31 December 2017 est.)
$1.391 trillion (31 December 2016 est.)
Stock of direct foreign investment - abroad
$1.701 trillion (31 December 2017 est.)
$1.528 trillion (31 December 2016 est.)
$2.298 trillion (31 December 2017 est.)
$1.981 trillion (31 December 2016 est.)
Market value of publicly traded shares
$1.519 trillion (31 December 2015 est.)
$1.495 trillion (31 December 2014 est.)
$1.541 trillion (31 December 2013 est.)
$1.716 trillion (31 December 2015 est.)
$1.739 trillion (31 December 2014 est.)
$1.936 trillion (31 December 2013 est.)
Central bank discount rate
0.5% (31 December 2016)
0.75% (31 December 2009)
0% (31 December 2017)
0% (31 December 2010)

note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks in the euro area

Commercial bank prime lending rate
2.6% (31 December 2017 est.)
2.65% (31 December 2016 est.)
1.67% (31 December 2017 est.)
1.78% (31 December 2016 est.)
Stock of domestic credit
$1.253 trillion (31 December 2017 est.)
$1.166 trillion (31 December 2016 est.)
$5.033 trillion (31 December 2017 est.)
$4.433 trillion (31 December 2016 est.)
Stock of narrow money
$621.8 billion (31 December 2017 est.)
$555.7 billion (31 December 2016 est.)
$2.453 trillion (31 December 2017 est.)
$2.016 trillion (31 December 2016 est.)

note: see entry for the European Union for money supply for the entire euro area; the European Central Bank (ECB) controls monetary policy for the 18 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of money circulating within their own borders

Stock of broad money
$621.8 billion (31 December 2017 est.)
$555.7 billion (31 December 2016 est.)
$2.453 trillion (31 December 2017 est.)
$2.016 trillion (31 December 2016 est.)
Taxes and other revenues
35.7% (of GDP) (2017 est.)
45% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
1.1% (of GDP) (2017 est.)
1.3% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 7.9%
male: 8.4%
female: 7.5% (2018 est.)
total: 6.2%
male: 7.1%
female: 5.1% (2018 est.)
GDP - composition, by end use
household consumption: 53.7% (2017 est.)
government consumption: 12% (2017 est.)
investment in fixed capital: 24.5% (2017 est.)
investment in inventories: -1.4% (2017 est.)
exports of goods and services: 65.1% (2017 est.)
imports of goods and services: -54% (2017 est.)
household consumption: 53.1% (2017 est.)
government consumption: 19.5% (2017 est.)
investment in fixed capital: 20.4% (2017 est.)
investment in inventories: -0.5% (2017 est.)
exports of goods and services: 47.3% (2017 est.)
imports of goods and services: -39.7% (2017 est.)
Gross national saving
33.8% of GDP (2017 est.)
32.3% of GDP (2016 est.)
33.9% of GDP (2015 est.)
28% of GDP (2017 est.)
28.2% of GDP (2016 est.)
28.1% of GDP (2015 est.)

Source: CIA Factbook