General Overview of the Switzerland Economy

Switzerland's GDP (Gross Domestic Product) of almost $380 billion (2006) places its economy on the 20th position in the world. Even though the economy is weighted as being not very big, it enjoys one of the largest in the world GDP per capita. It is also characterized as being highly technology advanced and experiencing significant economic growth. The prosperity of the country mainly stems from its expertise in technology oriented manufacturing, tourism and banking.

Among the most famous sectors of Switzerland are:

• Chemical industry
• Pharmaceuticals industry
• Machinery industry
• Precision instruments production
• Watches industry
• Financial services sector

All of these traits combined with its political stability have led to the establishment of Switzerland's reputation as one of the safest in economic terms places, which is reflected in the stability of its currency.

Switzerland is a famous destination for offshore capital due to its stability. As a result, the banking and insurance industries employ the biggest percentage of the population and contribute the largest portion of the GDP.

Under the conditions of global risk aversion, capital flows represent the major driver of the economy, which is due to Switzerland's confidentiality and overall stability. On the other hand, under the conditions of risk-seeking trade flows represent the main driver of the economy. A big portion of the trades executed by Switzerland are done with Europe, Germany and France being on the top of the list regarding European partners. Additionally, Switzerland heavily trades with the US.

A variation between a surplus and deficit has been observed on the merchandise trade flow. However, the recent account of the country is marked by a surplus. Even though Switzerland doesn't offer high yields, FDI (Foreign Direct Investment) has been largely attracted thanks to the safety of capital, which has greatly contributed to the current account surplus.

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