Switzerland defies all crises

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In the fall, there was great fear that Switzerland and its economy might be swept away by the geopolitical chaos of the Ukrainian war. At that time the economic engine was still running, but an energy crisis was approaching and pessimism was spreading.

Rudolf Minsch (55), chief economist of the economic umbrella organization Economiesuisse, spoke of a “multi-front war” that companies are about to fight. But the harsh winter – and with it the feared electricity and gas shortages – did not materialize. Jan-Egbert Sturm, head of the economic research center KOF at ETH Zurich, said in an interview as early as January: “The world is weakening, Switzerland is showing strength.”

Business-friendly population

Even if many do not want to admit it: we are in better shape economically than we feel! “We go from crisis to crisis and we always see that we are doing well,” says Heike Scholten (52). «The Swiss economy is resilient and agile.» Therefore, it can react quickly to economic and special challenges such as the corona epidemic.

The social scientist is currently working on a project investigating the attitude of the Swiss population towards the economy. “Compared to other countries, Switzerland is much more business-friendly,” Scholten says.

A good foundation for a successful business. As recent economic figures show. Inflation fell pleasingly sharply in April. The unemployment rate was 2.0 percent. And so it is lower in April than it has been since 2001.

It’s not just about salary

st. “The Swiss economy has benefited from mild temperatures,” says Caroline Hilb, 45, head of investment strategy at Wales Kantonalbank. “The industry still had full order books and construction was going well. Even in winter, construction companies were desperately looking for workers.”

The robust labor market and the shortage of skilled workers strengthen the bargaining power of workers and workers. But without abusing them for wage excesses: “Although wages have also risen due to inflation. But more holidays, more flexible hours and locations are also being discussed,” Hilb says.

Advantage: There is less risk of a wage-price spiral that will further increase inflation in Switzerland. Employers appreciate this, too. “Switzerland has many modern entrepreneurs on their toes. You know the employees are my resource, I want to rock my shop with them,” Scholten explains. His conclusion: “It’s fun to do business in Switzerland, there are many success stories.”

Consumption is doing well

And the Swiss economy won’t spoil its joy so easily: There has probably not been much growth in the first few months of the current year, but Hilb believes that will change again soon: “Industry order books are getting less full right now, but the situation will ease in the second half of the year. Outlook is positive, You can hear it from the companies themselves.”

This also has to do with significantly higher inflation in neighboring countries. “The Swiss industry is better able to handle price increases, which are moderate compared to other countries, better than their competitors in other countries,” Hilb explains.

An important pillar of the Swiss economy is consumption. Although the mood among consumers is pessimistic, Hilb is bursting: “But that doesn’t actually show up in retail sales that increased in the first quarter,” he says.

This also has to do with the fact that job security is high in Switzerland thanks to low unemployment. “People trust the Swiss economy and make larger purchases,” Hilb says.

frugal Switzerland

Finally, the cantons and their finances benefit from the strong Swiss economy. For the first time in 14 years, all cantons are in black in state accounts for 2022. Reasons: careful budgeting, extremely high tax revenue, and the Central Bank’s high dividends.

Compared to other European countries, the state plays a more reserved role in Switzerland. According to Scholten, state action is not denied, but should be targeted: “There is a very high awareness in Switzerland that you cannot spend more than you earn.”

The Central Bank, which made a big loss last year, says the same thing. Therefore, the SNB will not distribute profits to the Confederation or the cantons this year. This should rebalance one or the other cantonal budget for 2023.

Source :Blick