January 18, 2010
OECD Economic Survey of Switzerland 2009
"As in most OECD countries, the global financial crisis pushed the Swiss economy into recession. However, despite the weight of financial intermediation in economic activity and significant losses of the large internationally active Swiss banks in the US subprime mortgage market, Switzerland has so far performed better than most OECD economies. This relatively benign course of events reflects the sectoral specialisation of manufacturing, the financial health of the domestically-oriented smaller banks, the absence of a housing cycle and a monetary stance that turned expansionary relatively early on. Nonetheless, the current recession is likely to lead to high unemployment part of which risks becoming persistent. Also, deflation risks rose as core inflation was getting closer to zero. In the medium term, the fall out of the global financial crisis for Switzerland could be substantial: scope for expansion of financial services may have diminished and the weakness of trend productivity growth appears to continue, denting the still significant lead of Switzerland‘s living standards vis à vis many other OECD countries. Furthermore, the impact of the global financial crisis on the government’s finances will be substantial and lasting, while ageing related spending pressures mount in the longer term."