Despite a multitude of natural resources, the Swiss economy is among the worlds most advanced and prosperous.

Per capita income is virtually the highest in the world, as are wages. Trade has been the key to prosperity in Switzerland. The country is dependent upon export markets to generate income while dependent upon imports for raw materials and to expand the range of goods and services available in the country. Switzerland has liberal trade and investment policies and a conservative fiscal policy. The Swiss legal system is highly developed, commercial law is well defined, and solid laws and policies protect investments. The Swiss franc is one of the world's soundest currencies, and the country is known for its high standard of banking and financial services.

Being so closely linked to the economies of Western Europe and the United States, Switzerland has not been able to escape recent slowdowns experienced in these countries. During most of the 1990s, the Swiss economy was Western Europe's weakest, with annual GDP growth averaging 0% between 1991 and 1997. Beginning in late 1997, the economy steadily gained momentum until peaking in 2000 with 3% growth in real terms. But in 2001 the rate of growth dropped to 0.9%, and in 2002 and 2003 the economy virtually stagnated with real GDP up by only 0.1%. Economic performance in 2004 was better than expected thanks to eastern and Asian export markets, and GDP increased by 1.7%.

The recent economic slowdown has had a noticeable impact on the labor market. Unemployment increased from 2.6% in 2002 to 4.1% in December 2003, but has since dropped to 3.7%.

Switzerland's machinery, metals, electronics, and chemicals sectors are world-renowned for precision and quality. Together they account for well over half of Swiss export revenues.

In agriculture, Switzerland is about 60% self-sufficient. Swiss farmers are one of the most highly protected and subsidized producer groups in the world. OECD estimates show that Switzerland is subsidizing more than 70% of its agriculture, compared to 35% in the EU.

Tourism, banking, engineering, and insurance are significant sectors of the economy and heavily influence the country's economic policies. Swiss trading companies have unique marketing expertise in many parts of the world, including Eastern Europe, the Far East, Africa, and the Middle East. Not only does Switzerland have a highly developed tourism infrastructure, the Swiss also are intrepid travelers.

The Swiss federal government remains deeply divided over EU membership as its long-term goal, and in a March 2001 referendum more than 70% of the voters rejected rapid steps toward EU membership. The issue of EU membership is likely to be shelved for several years, if not a decade.

Facts about Switzerland

The citizens of Switzerland go by the name “Swiss.” The population totals about 7.3 million and grows less than one percent a year in size. Religiously, Swiss categorize themselves as Roman Catholic 42%, Protestant 33%, Muslim 4.3%, others 5.4%, no religion 11%. Linguistically, they speak the following languages: German 63.7%, French 20.4%, Italian 6.5%, Romansch 0.5%, other 9.4%. The literacy rate is claimed to be 100 percent and the average life expectancy is 76.5 years for men and 82.5 for women.

As these facts about Switzerland show, the country is unique in Europe from neutrality to its canon government structure, no country has managed to do so much with so many hostile neighbors.