88w00051

Accessing the Economic Environment

Switzerland takes pride in being host to among the most exquisite engineering sectors that the globe enjoys. Ideally, the engineering industry in conjunction with electronics as well as metals employs an approximate nine percent of the entire Swiss workforce contributing roughly forty percent of the Swiss export income. Primarily, precision engineering dealing with among others, watches and clocks, scientific instruments, machine building, heavy machinery including turbines, take precedence in the Swiss engineering industry. Secondly, the food industry is enormous. The country is known to value high-quality products that the citizens attach high value to. Notably, the nation produces especially luxurious foods including top caliber of chocolates and cheese. Thirdly, the chemicals industry, including pharmaceuticals is a significant industry player in the Swiss economy.

Statistically, Switzerland is the fifteenth largest exporter globally. Notably, the exports from Switzerland amounted to approximately three hundred billion dollars in 2017 contributing to sixty-eight percent of the total country’s gross domestic product. The top ten principal exports include gems and precious metal that account for twenty-nine percent of the total exports, pharmaceuticals, machinery, clocks, and watches including parts, organic chemicals, ophthalmic technical, therapeutic apparatus, electronic equipment, plastics as well as plastic articles, fragrances, make-ups and articles of iron or steel. The supra mentioned exports account for roughly eighty-seven percent of Switzerland’s global shipment. The main imports on the other hand include precious metals which takes approximately thirty four percent of total imports, therapeutic drugs, machinery such as computers, automobiles, electric, equipment, organic chemicals, inorganic fuels such as oil, ocular, technical and medical apparatus, plastic articles and finally furniture, lighting, prefab buildings, bedding and signs. The top ten imports account for over three-quarters of the entire imports spectrum in the country (Workman, 2018, March 20).

Question Two

According to Trade Economics, Switzerland had a Gross Domestic Product of six hundred and sixty billion US dollars as at December 2016 growing at a rate of 1.9 percent year on year. Notably, the inflation rate as of February this year stands at 0.6 percent. The rate of interest stands at -0.75 percent. The level of unemployment stands at a low of 3.2 percent with the individual income, often referred to as the GDP Per capita, stood at 75,726 US dollars in December 2016. The Swiss franc compares positively with the globally accepted United States dollar with one Swiss franc equalling 1.05 US dollars. The level of investors’ funds inflow is mainly dependent on the level of return on investment that is subject to the rate of interest that assets in the host country accrue. Notably, given the negative interest rates in Switzerland, foreign investors and even local ones prefer to look for investment destinations that meet their return anticipations. As such, foreign direct investment has considerably reduced in Switzerland despite the benefits of all the other characteristics including strong currency, reduced inflation, and low unemployment (Economics, 2018).

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