Switzerland remains less exposed to the macroeconomic imbalances that have beset the southern European eurozone periphery countries in the past three years. It has a balanced budget, a large current account surplus, low inflation and a government debt level among the lowest for advanced economies. Further, its high national savings rate contributes to the large current account surplus. On the downside, despite a well-diversified trade portfolio, the country’s trade linkages with the rest of Europe and its financial haven status leave it vulnerable to developments in the eurozone. Home-grown economic imbalances exist as well.
Switzerland saw continued net immigration in the past decade, which slowed down the inversion of the demographic pyramid, in particular the ratio of the old to people of working age, compared to countries with negative birth rates and/or net emigration. Also, immigration has been skewed towards skilled labour, which filled the gaps in the domestic talent pool. Still, net immigration will not be enough to overcome the challenge of an ageing population, and state pension and other social security liabilities at current levels will necessitate discrete adjustments to be sustainable in the medium to long run.
NOTE The risk bars indicate the world distribution of the particular risk, from the lowest scoring country to the highest. The lower the score, the lower the risk or exposure to the particular indicator (i.e. a lower score is always positive).
All data is sourced from Zurich Risk Room
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