While the Organisation for Economic Co-operation and Development (OECD) has revised downwards its economic prediction for China and the United States, things continue to look up for Switzerland.This content was published on November 20, 2013 - 10:37
In its economic outlook published on Tuesday, the OECD saw a “steady recovery” for Switzerland for the next two years. Driving factors were the strong domestic market and a boost in exports.
For the current year, the OECD reckons on GDP growth of 1.9% – up from 1.4% in May. It added that domestic demand was based on constant immigration, wage increases and strong consumption.
For 2014, GDP growth was predicted to be 2.2% and for 2015 it would increase to 2.7%. A slowly increasing demand from abroad would complement robust domestic demand, according to the report.
It said the recovery in the tourism industry was a sign of a recovery in exports, but it warned that a continued strong franc could curb economic development.
Could do better
The OECD concluded that Switzerland was in better economic shape than its neighbours – growth in the eurozone, coming out of a recession, was predicted to increase to 1.6% by 2015 – but it was still not maximising its potential: productivity could be increased for a modest financial outlay, it believed.
To do this, infrastructure had to be improved and non-parental child supervision had to be expanded and made cheaper. This would also increase gainful employment.
The OECD lowered its outlook for the world’s two largest economies, the United States and China. However, Japan, the world’s third-largest economy, was set to gain more momentum than previously predicted in May.
For the entire OECD area, the outlook was unchanged: “a moderate albeit bumpy economic recovery.”
Shares and property boost wealth
The average person in Switzerland became more than 5% wealthier last year compared to 2011.
A rise in share prices and the market value of real estate contributed to the increase of CHF19,000 ($20,873) in a typical person’s finances. The latest figures from the Swiss National Bank (SNB) show net worth in 2012 stood at CHF374,000.
In terms of households, the Swiss also saw their riches go up by 6.4% to a total of CHF3,005 billion.
While the prices of homes increased across the board, so did mortgage loans, by close to 4%.
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