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The name ‘Switzerland’ conjures up images of snow-clad mountains, picturesque landscapes, paragliding, and pristine waters. Although it is a small country (see the image above), it has a significant economic standing on the European continent.

Switzerland is synonymous with world-class technology, precision manufacturing, and research and development. Swiss brands like Rado, Tag Heuer, Rolex, Nescafe, Chopard, Lindt, Nestle, etc., have carved a niche in the world market. The country attracts a large number of tourists, has one of the best financial systems, and has an educated and wealthy population.

What makes Switzerland a prosperous country? Let’s read more to understand the macroeconomics of Switzerland.

Financial Strength

Switzerland is famous for safe-keeping the dubious trails of black money. The norms of financial institutions swear to utmost secrecy of client’s information with no exclusion for whosoever. The trail of many money-laundering acts goes cold here. The country possesses huge gold reserves, making its currency (Swiss Franc) powerful globally.

Since the 18th century kings and wealthy noblemen trusted Swiss financial institutions to keep their treasure safe. The country is a natural vault with snowy mountains as its border. The main catalyst for its financial supremacy was its decision to stay neutral during the Second World War. Other countries engaged in war used to borrow currency from Swiss financial institutions in exchange for ill-gotten gold.

Industrial Prowess

Trade is difficult for a landlocked nation due to inaccessibility to the ports. Among the European countries, Switzerland was one of the first countries to industrialize. Their growth in the textile industry was at par with England’s textile exports. Additionally, Switzerland has mastered the manufacturing of heavy industrial machinery. Their quality is well known and the huge pricing covers the profit, transportation, and the overheads. The country is not blessed with any mineral resources still they are the largest importer of raw gold, one of the top refiners in the world, and send the purified gold to overseas market.

Citizens of Switzerland

The Government invests in financial literacy and education thus ensuring a skilled workforce for the economy. During the Industrial Revolution, men and women equally contributed to the workforce promoting gender equality. Switzerland is one of the top countries with the wealthiest adults in the world.

Taxation and political stability

The country is divided into Cantons (like States in India). Every Canton has its own taxation system and policies. They have federal liberty to decide the tax rates for individuals and corporations. Best practices are adopted in other Cantons, and there is healthy competition among them.

The collapse of Credit Suisse (one of the largest banks in the country) has raised questions about Switzerland’s financial supremacy. UBS (a rival of Credit Suisse) took over, which means there is no other big bank in the economy. The government and its citizens are smart to make lemonade whenever the situation gets sour.