Current situation and Prospect of the hottest Swis

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Introduction: in most years of the 1990s, Switzerland's economic growth ranked last among Western European countries. After the economic recovery from 1997 to 2000, Switzerland is once again facing the doom of economic depression due to its close ties with the European Union and the United States. In 2002, the GDP growth of Switzerland was only 0


in most years of the 1990s, Switzerland ranked last in economic growth among Western European countries. After the economic recovery from 1997 to 2000, Switzerland is once again facing the doom of economic depression due to its close ties with the European Union and the United States. In 2002, the GDP growth of Switzerland was only 0.5%, and it is expected to show negative growth in 2003. On the premise of the improvement of the global economic situation, the Swiss economy is expected to grow slightly in 2004

the outlook of the Swiss economy in this paper is based on the optimistic expectation that the world economy will accelerate in 2004, the economy of the United States and other English speaking countries will recover, and the economy of major Asian countries will perform more strongly. However, the huge international trade deficit of major economies, especially the United States, has cast a question mark on whether the global economy can continue to recover. Moreover, the domestic economy of EU countries and Japan is weak, and it is unable to help the United States resolve its huge trade deficit. At present, countries have adopted low interest rate policies to promote economic recovery, but the huge and rising current account and budget deficits make major economies in a very fragile state, so it is easy to turn to raising interest rates, leading to the setback of the current economic recovery. In addition, the uncertainty caused by many current international political risks may affect financial markets, trade flows and economic growth, and even subtly threaten economic growth

at present, the Swiss economy has the following characteristics: 1) high internationalization of trade and investment, especially strong dependence on the EU; 2) Although the indexes of Swiss economy are good, there are many structural defects hidden in it (lack of effective competitors and regulatory mechanism, high cartelization of industry, aging population, etc.), which has led to low growth of Swiss economy for nearly a decade, ranking last among industrialized countries in terms of economic growth rate and lack of vitality of the economy; 3) The continuous appreciation of the Swiss Franc will weaken Switzerland's competitiveness. The current guidelines for the Swiss economy are: to maintain the openness of the national economy, promote and ensure the liberalization of the international market, strengthen the multilateral trading system, and make Switzerland an active international partner; Further improve the legal environment in Switzerland, reduce the intervention of the administrative and private economy in the formation of market prices, and ensure the competitive production and service market in Switzerland; Build a good investment environment for the establishment and development of enterprises, promote the liberalization of the labor market, strengthen the attraction of Switzerland as an investment place, promote the further development of the competition mechanism, and make Switzerland an investment place for the development of high value-added products; Reform the vocational training system, improve the added value of products with scientific and technological knowledge, and make Switzerland an innovative education and Research Center; Pay attention to the welfare guarantee in the process of structural reform, strengthen labor cooperation, and make Switzerland a stable welfare state. We can see that in recent years, while promoting foreign trade and actively carrying out internal structural adjustment, Switzerland has increased the stimulation of domestic demand and invested in some large-scale infrastructure construction projects, such as the comprehensive renovation of national roads and the construction of the world-famous and costly world's longest land railway tunnel (55 kilometers) across the Alps

looking at the current international economic situation and the advantages and disadvantages of the Swiss economy, the author believes that the Swiss economy will rise slightly in 2004, but in the long run, the Swiss economy will still maintain a low growth trend, and the driving force of economic growth mainly comes from foreign demand

first, the overall economic stagnation

Switzerland has not been spared from the recent global economic weakness, and its economy has shown negative growth. UBS, Credit Suisse and the Swiss Federal Economic Administration all forecast negative real GDP growth rates in 2003. The estimate for next year is positive growth, which is expected to be 1%-1.5%. If the predicted growth can be achieved, the average annual growth rate of Switzerland from 2001 to 2004 is equivalent to about 0.4%, lower than the average growth rate of industrialized countries of 1.3%, lower than the euro zone countries of 0.7%. The CS index of Credit Suisse industry also showed that the economic development stagnated in the second half of 2003. This index shows that the major economic sectors affected are chemical industry, paper and paperboard industry, leather and plastics, and clock and watch manufacturing industry. The CS index in the second quarter of 2003 was the lowest since the early 1990s, and it is still falling, indicating that the recession in Switzerland has not ended. Constrained by the domestic economy, the initial spark of economic recovery came only from foreign demand. The following detailed analysis of the main components of GDP will explain this more clearly

II. Analysis of the composition of Switzerland's GDP


private consumption accounts for 60% of Switzerland's GDP. It still made a positive contribution to the economic growth in the first half of 2003, but it is also at the end of its strength, and it is difficult to do anything more

from 1998 to 2000, with strong economic development, private consumption showed a gratifying growth trend, with an average speed of 2.1%, 1% higher than the long-term average. When testing the bonding strength and surface defects of the surface coating of coated and non coated metal materials after winding deformation, the reason for the rapid growth of private consumption in Switzerland is that the employment rate increased by 5.6% in the four years from the first quarter of 1997 to the third quarter of 2001. On the contrary, the unemployment rate decreased from 5.7% to 1.5%. At the same time, the actual purchasing power increased, and households took a positive attitude towards employment safety and income. However, private consumption has shown the opposite trend since 2001. (1) From the fourth quarter of 2001 to the second quarter of 2003, the full-time employment rate declined by 2.8%, in other words, 50000 jobs were lost during the period. Although the part-time employment rate continues to rise, the speed has decreased significantly. In view of the internal restructuring of the Swiss economy and the structural adjustment of the public sector, the downward trend in the employment rate will continue until next year. (2) From mid-2001 to September 2003, the unemployment rate rose from 1.5% to 3.7%, and has recently broken through the psychological threshold of 4%. Due to layoffs, mergers or closures, the unemployment rate will rise further, reaching a peak of 4.1% - 4.2% at the beginning of next year, with a total unemployment of 165000. Then the unemployment rate will not fall soon. (3) The average wage and remuneration increased by 1% on average, and the average inflation rate was 0.7%. While the costs of health care, medical insurance and retirement insurance continued to increase, and the increase in actual purchasing power would be very limited

in this case, Swiss people are inevitably skeptical about employment and income security. Recently, there has been a debate in society about whether the Swiss welfare system has long-term vitality. It has aggravated people's doubts and promoted personal and household consumption to be more cautious

therefore, economists estimate that private consumption in 2003 and 2004 was only 0 A small increase of about 8%

the growth of public consumption is slightly stronger than that of private consumption, which is estimated to be 1.6% in 2003 and 1% in 2004. Due to the embarrassment of public finance and the public pressure on the government to increase revenue and reduce expenditure, the growth of public consumption showed a downward trend. Both Bloch and Mertz, the newly elected federal commissioners, have advocated cutting spending and public investment, and the new government will face greater pressure


the sluggish investment situation of enterprises has not been improved. The capital investment of enterprises and companies in equipment began to decline since the middle of 2001, and fell by 9.3% in 2002. The total investment level in recent years is lower than that in the last decade of the last century. The degree of investment weakness in Switzerland exceeds that of the euro zone countries, and even exceeds that of Japan, which has been in economic stagnation for a decade

the reasons for the decline of investment in Switzerland in the past two and a half years are the excessive expansion of production capacity during the investment boom, the poor export performance, the reduction of the scale of the financial services industry and the reduction of profits

the equipment investment in 2004 should be improved. Due to too little investment in the past few years, the delayed renewal and reasonable expenditure have formed a certain scale of demand. With the improvement of the global economy, this trend will be further strengthened. When more and more production capacity is put into use, it will promote the expansion of capital expenditure next year. However, the premise is that low interest rates can be maintained, and the "positive impact of corporate restructuring on personal income" has emerged. Undoubtedly, enterprises will still take a cautious attitude towards investment, because enterprises generally have doubts about the sustainability of the world economic recovery. Credit Suisse estimates that investment in equipment will continue to fall by 5% this year, and will grow by 1% in 2004 if the economic recovery can accelerate

construction investment also needs a long time to recover. Although the construction industry has been in a state of growth since 2002, the growth rate is not as good as a quarter

the main investment power of buildings should come from residential buildings. Since the summer of 2003, residential buildings have become a highlight. The extremely low vacancy rate of existing housing and income considerations will make it profitable to build apartments for self occupancy or rent, resulting in increased demand. In the second quarter, the number of new houses and houses under construction increased, and the number of approved residential projects increased at the same time. However, commercial buildings are seriously depressed due to the surplus of office buildings, especially in Zurich. Under the pressure of limited finance and cost saving, public sector investment in infrastructure and buildings will also be limited. The above situation is likely to continue until 2004

in the field of infrastructure construction, super large projects such as neat (high-speed railway project across the Alps) and bahn2000 (Swiss railway), as well as the maintenance of main roads, will maintain the infrastructure construction at a high level in the next few years. However, there is no more impetus. In the 1990s, only temporary maintenance was carried out on the supply of roads and sewage facilities, so a certain demand was accumulated. Despite the financial constraints, it is still necessary to carry out these projects because delaying maintenance will only lead to higher costs in the end. However, the investment scale caused by the infrastructure industry will not have any impact on the overall economic situation

economists generally believe that under the combined action of the above factors, the actual construction investment will still decline slightly this year, and increase by about 1% in 2004. And regional differences are obvious

according to the analysis, the domestic factor of GDP will make the Swiss economy grow in the next year, but it is still not strong enough. It is difficult to really promote the Swiss economic recovery by relying on domestic factors. Therefore, we can only hope for foreign demand. So what about foreign demand

foreign trade

at present, Switzerland's foreign trade situation has improved slightly, but on the whole, the foreign trade recession that began in the second half of 2001 will continue. Economists at Credit Suisse Bank estimated that the real export of goods and services in Switzerland fell by 0.3% in 2003, and the import will decline by 2.1%. In 2004, exports are expected to gradually increase from slow to fast, with a growth rate of 1.4% and imports increasing by 0.8%. The contribution rate of foreign trade to GDP is positive

under the influence of the weak domestic economy, Switzerland's imports of goods and services fell by 6.8% in the second quarter of 2003; The decline in exports was relatively small, only 0.7%. Both imports and exports improved in the third quarter. Exports increased by 5.2% over the previous quarter, hitting a new high since the end of 2000, becoming the main driving force for economic growth; enter

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