The Swiss economy is sluggish finds a report by the Organisation for Economic Co-operation and Development (OECD), which suggests reforms to restore productivity growth.
According to the latest OECD Economic Survey of Switzerlandexternal link, “the Swiss economy has shown considerable resilience to shocks, but economic growth remains slow, and per capita income levels still hover at levels attained before the global economic crisis”.
In June, the OECD had predicted economic growth of 1.5% in Switzerland; now it expects just 0.8%. However, it projects growth of 1.7% in 2018 and 1.8% in 2019.
“Further reforms are needed to restore productivity growth, boost incomes and ensure that today’s high living standards and levels of well-being are passed on to future generations,” states the report.
The OECD recommends that Switzerland spend more of its available budget, except in the case of agricultural subsidies. It calls for more measures to help start-ups get off the ground, and less state involvement in the energy, telecommunications and transport sectors in order to increase competition.
The labour force also needs more attention in order to help maintain Switzerland’s high standard of living.
“To address ageing-related challenges, the survey recommends Switzerland fix the retirement age at 65 for all workers, and thereafter link it to life expectancy,” continues the OECD report, pointing out the need for “increased financial incentives to work longer before retirement and promotion of programmes to lengthen healthy working lives”.
The survey also highlighted the need for a “growing supply of a high-skilled workforce” plus “nimble, dynamic and inclusive skills-training and a life-long learning system” – in part through more small firms taking on apprentices. In addition, it noted that women and immigrants were not achieving their full potential in the Swiss labour market. The OECD recommends making childcare more affordable to help mothers pursue careers.