Switzerland ...

180 Pages·1965·4.306 MB·English

by  OECD

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Special Features: Coping with Ageing e Economic Surveys
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Latest Surveys Available "Partners in Transition"
Switzerland
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ISSN 0376-6438
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2000, Supplement No.1 December 2000
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OECD
ECONOMIC
SURVEYS
1999-2000
SWITZERLAND
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and
which came into force on 30th September 1961, the Organisation for Economic Co-operation
and Development (OECD) shall promote policies designed:
– to achieve the highest sustainable economic growth and employment and a rising
standard of living in Member countries, while maintaining financial stability, and
thus to contribute to the development of the world economy;
– to contribute to sound economic expansion in Member as well as non-member
countries in the process of economic development; and
– to contribute to the expansion of world trade on a multilateral, non-discriminatory
basis in accordance with international obligations.
The original Member countries of the OECD are Austria, Belgium, Canada, Denmark,
France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United
States. The following countries became Members subsequently through accession at
the dates indicated hereafter: Japan (28th April 1964), Finland (28th January 1969),
Australia (7th June 1971), New Zealand (29th May 1973), Mexico (18th May 1994),
theCzech Republic (21st December 1995), Hungary (7th May 1996), Poland
(22ndNovember 1996) and Korea (12th December 1996). The Commission of the
European Communities takes part in the work of the OECD (Article 13 of the OECD
Convention).
Publié également en français.
© OECD 2000
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Table of contents
Assessment and recommendations 9
I. Recent trends and short-term prospects 25
An improving macroeconomic performance 25
A large and increasing current external surplus 31
Rapidly falling unemployment 33
Stable prices and wages 39
The outlook to 2002 41
II. Monetary and fiscal policies 47
Monetary policy 47
Fiscal policy 55
III. Progress in structural reform 67
Background 67
Product market competition 76
Labour-market flexibility 90
Assessment 97
IV. Ageing: the Swiss case 99
Introduction 99
The challenge of an ageing population 100
Institutional arrangements for supporting the elderly 104
Economic and financial implications of the existing framework 111
Assessment and agenda for reform 132
Notes 138
Bibliography 150
Annexes
I. Population projections, the system of retirement income andincentivesto retire 155
II. Invalidity and early retirement 161
III. The second-tier pension system 165
IV. The Swiss health care system: problems and possible reforms 168
V. Calendar of main economic events 177
(cid:127)(cid:127)(cid:127)(cid:127)(cid:127)
© OECD 2000
4 OECD Economic Surveys: Switzerland
Boxes
1. The proposed constitutional rule to stabilise federal finances 64
2. The reform of the unemployment insurance law 92
3. Maintaining prosperity in an ageing society: recommendations for Switzerland 101
4. Domestic aid and day-care services: Spitex 110
5. The 11th revision to the AVS 117
6. The 1st revision to the LPP 119
Tables
1. Supply anduse ofcurrent output 26
2. Current external account 35
3. Employment trends 36
4. Structure ofunemployment 38
5. Price trends 41
6. Short-term projections 45
7. Monetary aggregates 49
8. Target forthethree-month Swiss franc LIBOR 54
9. Confederation budget 58
10. Government accounts 59
11. The financial plan oftheConfederation 62
12. Implementing structural reform: an overview 73
13. Comparisons ofold-age care systems 112
14. Poverty rates byage 113
15. Labour-market indicators 114
16. Participation rates ofolder workers andaverage retirement age 115
17. Incentives toretire under theflexible retirement arrangements 121
18. Average investment returns onpension assets 123
19. Costs oftheproposed change intheLPP 126
20. Old-age expenditure inOECD countries 127
21. Social spending inSwitzerland: 2000-2025 128
Annexes
A1. Life expectancy 155
A2. Sensitivity tests oftheimpact ofdifferent discount rates ontheimplicit tax
onan additional year ofearnings 158
A3. Incentives toretire under theflexible retirement arrangements, marriedcouple
withone earner 159
A4. Age-related credits to“notional” individual retirement accounts 166
A5. Comparisons ofhealth-care systems 169
Figures
1. Potential output and output gap 27
2. Macroeconomic performance 28
3. Contribution to real GDP growth 29
4. International competitiveness and trade 32
5. Foreign trade indicators 34
6. Output and employment 36
7. Consumer prices: an international comparison 40
8. Selected components of inflation 42
9. Labour cost and productivity 43
10. Indicators of economic activity 44
© OECD 2000
Table of contents 5
11. The adjusted monetary base 48
12. Interest rates 51
13. Exchange rates 52
14. Monetary conditions index (MCI) 53
15. Short-term three-month LIBOR developments 55
16. Budget balances 56
17. Cyclically-adjusted budget balances 56
18. Gross government debt 62
19. An international comparison of GDP per capita 67
20. GDP per capita and total factor productivity 68
21. Long-term growth performance 69
22. An international comparison of growth performance in the 1990s 70
23. Estimates of potential output growth 71
24. International comparison of price levels 77
25. Electricity prices in industry and households 80
26. An international comparison of telecommunications prices 84
27. Internet access costs 86
28. International comparison of producer and consumer support estimates 89
29. International comparison of unemployment rates 90
30. Total and old-age dependency ratios 100
31. The structure of old-age pension benefits 107
32. The structure of old-age pension benefits: replacement rates 108
33. Healthcare expenditure 130
Annexes
A1. Probability of obtaining an invalidity benefit 162
A2. Number of AI pension benefits and unemployment rate 163
© OECD 2000
BASIC STATISTICS OF SWITZERLAND
THE LAND
Area (1 000 sq. km) 41.3 Major cities, 1998 estimates
Cultivated land, grassland and pastures (1 000 inhabitants):
(1 000 sq. km) 15.8 Zurich 350.7
Forests (1 000 sq. km) 12.5 Basle 173.2
Geneva 175.0
Bern 128.8
THE PEOPLE
Total population , 31 December 1999, estimate Number of foreign workers, 1999
(thousand) 7 164 (thousand) 953
Number of persons per sq. km 174 Average increase in the number of foreign
Net annual rate of population increase workers census, end of August (thousand):
average 1990-99 (per 1000 inhabitants) 6.6 1962-72 2.6
Civilian employment in 1999 (thousand) 3 873 1973-99 0.5
Percentage distribution:
Agriculture 4.7
Industry and construction 25.8
Other activities 69.5
PRODUCTION
Gross domestic product (current prices) in 1999 (Billion Swiss francs) 389
Growth of real GDP, 1990-99 average (annual rate, per cent) 0.6
Real gross fixed investment in 1999 (per cent of GDP) 25.8
Growth of real investment, 1990-99 average (annual rate, per cent) 0.1
THE GOVERNMENT1
Public consumption in 1999 (% of GDP) 14.5 National State
Revenue of the Confederation in 1999 (% of GDP) 10.1 Composition of Parliament Council Council
Total debt in 1999 (% of GDP) 51.3 Number of seats:
Socialists 53 6
Central Democratic Union 44 7
Radical Democrats 43 18
Christian Democrats 35 15
Other 25
Last elections: October 1999
Next elections: October 2003
FOREIGN TRADE
Exports of goods and services (% of GDP), Imports of goods and services (% of GDP),
annual average 1990-99 37.1 annual average 1990-99 33.5
Commodity exports, fob Commodity imports, cif
million of Swiss francs, in 1999 114 446 million of Swiss francs, in 1999 113 416
Percentage distribution: Percentage distribution:
By area, in 1999: By area, in 1999:
To OECD countries 84.4 To OECD countries 92.0
To EU countries 62.6 To EU countries 79.7
To OPEC countries 2.3 To OPEC countries 1.2
By categories, in 1999: By categories, in 1999
Raw materials and semi-finished goods 27.0 Raw materials and semi-finished goods 27.6
Capital goods 35.5 Capital goods 30.5
Consumer goods 37.3 Consumer goods 38.8
Energy 0.2 Energy 3.1
THE CURRENCY
Monetary unit : Swiss franc Currency unit per US$, average of daily
figures
Year 1999 1.5027
September 2000 1.7573
1. Confederation, cantons and communes.
This Survey is based on the Secretariat’s study prepared
for the annual review of Switzerland by the Economic and
Development Review Committee on 11 September 2000.
(cid:127)
After revisions in the light of discussions during the review, final
approval of the Survey for publication was given by the Committee
on 9 October 2000.
(cid:127)
The previous Survey of Switzerland was issued in
July 1999.
Assessment and recommendations
Macroeconomic The Swiss economy recovered vigorously in the second
performance has half of 1999, following a decade of relatively poor perfor-
improved mance. Economic growth accelerated to annual rates of
substantially more than 3per cent, having been anaemic in the preceding
and employment four quarters, and this rate has been sustained into 2000.
growth has The expansion has been led by surging exports and was
resumed supported by robust household consumption. Employment
has responded unusually rapidly to the acceleration of out-
put, with job growth picking up in late 1999 and reaching its
highest rate since 1991. The improving labour-market situa-
tion has also shown up in strongly increasing job vacancies
and a steep fall in short-time work. All of this has helped to
improve both consumer confidence and the business cli-
mate. The latest business employment survey shows a
degree of optimism last recorded some ten years ago.
Unemployment While the cumulative employment gain since 1997 has
has fallen further been rather modest compared with earlier periods of eco-
but underlying nomic recovery, it is sufficient to have made a substantial
inflation remains inroad into unemployment, given a mild contraction in
low, underpinned labour-force participation. The rate of registered unemploy-
by wage ment has declined from its peak of 5.4per cent in the spring
moderation of 1997 to 1.9per cent in the third quarter of 2000, a rate last
seen in 1992. Inflation picked up at both the wholesale and
consumer level during 1999, reflecting the surging prices of
imported mineral oil products and accentuated by the
weakening Swiss franc relative to the USdollar (in common
with the euro); but CPI inflation has since steadied, fluctuat-
ing around 1¾per cent during the first three quarters of
2000. With non-oil CPI inflation varying between 0.3 and
0.8per cent, Switzerland’s inflation remained in line with
that of the best performers among OECD countries. Price
© OECD 2000