Foundation of Business

Analytics

Assignment 6
Regression Analysis
I. OVERVIEW ABOUT
SWITZERLAND
Switzerland, officially the Swiss
Confederation, is a federal republic in
Europe. The country consists of 26 cantons,
and the city of Bern is the seat of the federal
government. The country is located in
Western-Central Europe, bordering Italy to
the south, France to the west, Germany to the
north, and Austria and Liechtenstein to the
east. Switzerland is a landlocked country with
a total area of 41,285 km² and geographically
includes the Alps, the Swiss Plateau, and the
Jura. Although the Alps cover most of the
country's territory, the roughly 8 million
Swiss population is mostly concentrated in
the highlands. The largest cities in the
country are also located in the plateau
region, including two global cities and
economic centers, Zurich and Geneva.
Switzerland has 48 mountains that are 4,000
meters (13,000 ft) or more above sea level.
Monte Rosa is the tallest mountain at 4,634 m
(15,203 ft), but the Matterhorn with its
elevation (4,478 m or 14,692 ft) is often said
to be the most famous. Both are located in
the Pennines Alps in the state of Valais, on
the border with Italy. The section of the Bern
Alps above the Lauterbrunnen valley consists
of 72 waterfalls, best known for the Jungfrau
mountains (4,158 m or 13,642 ft) Eiger and
Mönch, and the many picturesque valleys in
the area. To the southeast lies the long
Engadin Valley, including the area of St.
Moritz of Graubünden, also famous; The
highest peak in the Bernina Alps is Piz
Bernina (4,049 m or 13,284 ft)
II, OVERVIEW ABOUT
THE SWITZERLAND
ECONOMIC

Switzerland has a stable, prosperous, and high-

tech economy that enjoys great wealth. In
2011, the country was ranked the world's
wealthiest per capita, while the Credit Suisse
Global Wealth Report 2013 showed that
Switzerland had the highest wealth per capita
for that year. Switzerland is the 19th largest
economy by nominal GDP and the 11th largest
by purchasing power parity (2016). This is the
18th largest exporter in the world (2015)
despite its small size. Switzerland ranks highest
in Europe on the 2010 Index of Economic
Freedom. Switzerland's average nominal GDP is
higher than that of the major economies of
Western-Central Europe and Japan.
II, OVERVIEW ABOUT
THE SWITZERLAND
ECONOMIC

The World Economic Forum's Global

Competitiveness Report ranks Switzerland's
economy as the most competitive worldwide
(2016-2017) while the European Union ranks
Switzerland as the most innovative country
on the continent. For most of the twentieth
century, Switzerland was the wealthiest
country in Europe by a considerable margin
(in terms of GDP per capita). In 2007, the
median household income in Switzerland
was estimated at $137,094 in terms of GDP
per capita. purchasing power parity while
the median income is $95,824. Switzerland is
one of the countries with the largest current
account balance as a percentage of GDP.
II, OVERVIEW ABOUT
THE SWITZERLAND
ECONOMIC

The most important economic sector of

Switzerland is manufacturing. The
manufacturing industry consists largely of
the production of specialized chemical,
medical and pharmaceutical products,
scientific and precise measuring
instruments, and musical instruments. The
largest exports are chemicals,
machinery/electronics, and precision
instruments/watches. Service exports
account for one-third of total exports. The
service sector, especially banking,
insurance, tourism and international
organizations is another important
industry in Switzerland.
II, OVERVIEW ABOUT
THE SWITZERLAND
ECONOMIC

About more than 5 million people work in

Switzerland according to 2017 figures, about
25% of workers belong to a union in 2004.
Switzerland has a more flexible labor market
than neighboring countries and
unemployment rate is very low. The
unemployment rate increased from 1.7% in
June 2000 to a peak of 4.4% in December
2009. The unemployment rate fell to 3.2% in
2014 and did not decrease further in 2015
and 2016. Population growth driven by net
migration is quite high, at 0.52% of the
population in 2004. Foreign nationals
accounted for 21.8% in 2004, about the same
as Australia. GDP per hour worked is the 16th
highest in the world, with 49.46 international
dollars in 2012.
II, OVERVIEW ABOUT
THE SWITZERLAND
ECONOMIC

The private sector dominates the Swiss

economy and taxes are low by Western
standards. Switzerland is a relatively easy
country to do business, ranking 26th on the
Ease of Doing Business Index (2016).
Switzerland experienced slow growth in the
1990s and early 2000s, generating greater
support for economic reforms and
harmonization with the European Union.
According to Credit Suisse, in 2007 only
about 37% of residents owned a house,
among the lowest in Europe. Housing and
food prices were 171% and 145% higher
than in EU countries in 2007, equivalent to
113% and 104% respectively compared to
Germany.
II, OVERVIEW ABOUT
THE SWITZERLAND
ECONOMIC

The Swiss federal budget amounted to 62.8

billion Swiss francs in 2010, equivalent to
11.35% of the national GDP for the year;
however regional (state) and municipal budgets
are not included in the federal budget and total
government spending is close to 33.8% of GDP.
The federal government's main source of
income is the value-added tax (33%) and direct
federal tax (29%) and spending is mainly
located in the social and financial welfare & tax
areas. Swiss Confederation spending increased
from 7% of GDP in 1960 to 9.7% in 1990 and to
10.7% in 2010. While the social and financial
welfare & tax sectors increased from 35 % in
1990 to 48.2% in 2010, a significant decline in
spending is taking place in the agriculture and
defense sectors, from 26.5% to 12.4% (2015
estimate).
II, OVERVIEW ABOUT
THE SWITZERLAND
ECONOMIC

Agricultural protectionism is a rare

exception to Switzerland's free trade
policy, which contributes to high food
prices. Product market liberalization
lags behind many EU countries
according to the OECD. However, the
domestic purchasing power is among
the best in the world. Apart from
agriculture, economic and trade
barriers between the European Union
and Switzerland are minimal and
Switzerland has free trade agreements
in the world. Global. Switzerland is a
member of the European Free Trade
Association (EFTA).
 III. GDP

According to the Principle-of-Economics of

Mankiw, GOVERNMENT REVENUE AS A
PERCENTAGE OF GDP. This figure shows revenue
of the federal government and of state and local
governments as a percentage of gross domestic
product (GDP), which measures total income in
the economy.
 III. GDP

Gross Domestic Product (GDP) is the monetary

value of all finished goods and services made
within a country during a specific period.
GDP provides an economic snapshot of a
country, used to estimate the size of an economy
and growth rate.
GDP can be calculated in three ways, using
expenditures, production, or incomes. It can be
adjusted for inflation and population to provide
deeper insights.
Though it has limitations, GDP is a key tool to
guide policymakers, investors, and businesses in
strategic decision-making.
 III. GDP
According to the world bank's 2019 nominal GDP rankings, Switzerland
ranks 20th out of 189 countries ranked with more than 700 thousand
million USD, about 60 thousand million USD behind the adjacent country,
Turkey. but with a modest population of only 8.6 million people,
Switzerland is the country with the 5th highest GDP per capita in the world
(2019) 81,994 usd. Based on the data of World Bank from 2000 to 2019,
during 20 years, Switzerland's GDP increased fairly evenly from about 270
billion USD in 2000 - ranked 17th in the world, the figure peaked in 2017
with more than 700 billion USD and reached approximately 700 billion USD
by the end of the period.
The Swiss economy grew by 1.1% in 2017, its weakest pace of all
the period compared with the high 4.11% in 2007. Private
consumption grew at a weak pace of just 1.2% in 2017
compared to 2016 (+1.5%) and 2015 (+1.8%). Economic
uncertainties were still weighing on companies’ hiring intentions
and the unemployment rate remained above 3% all year. This
led to a further decline in retail sales which are back at their
2007 level. Consumer confidence has been very low in 2017, at
its 2009/2011 average (1.3), which explains the limited private
consumption growth (0.2% QoQ on average). With increased
consumer confidence during the first quarter of 2018 and a
brightening economic outlook, we expect private consumption
growth to rebound from 1.2% in 2017 to 1.5% in 2018.

Industrial production was growing by 9% YoY in 4Q17. The recovery in

industrial activity, mainly led by external demand, has brought capacity
utilization back to its 2012 level. With the industry running at more than
84% of capacity, stronger business investment should be seen in coming
quarters. After the strong investment rebound in the third quarter,
business investment declined by 1.3% in 4Q17. This was partially
compensated by household investment, leaving the investment growth at
0.4% QoQ in 4Q17. All in all, domestic demand was strongly supported by
investment while private consumption was still lagging behind at the end
of the year.
According to the Principle-of-Economics of Mankiw,
Inflation refers to the rise in the prices of most goods
and services of daily or common use, such as food,
clothing, housing, recreation, transport, consumer
staples, etc. Inflation measures the average price
change in a basket of commodities and services over
time. The opposite and rare fall in the price index of
this basket of items is called ‘deflation’. Inflation is
indicative of the decrease in the purchasing power of a
unit of a country’s currency. This is measured in
percentage.

IV. INFLATION
Inflation in Switzerland has been kept relatively low, with a peak of
2.5% in 2007 and a low of deflation between 2015 and 2017. The
Swedish economic picture has brightened considerably since the
recession. growth in the early 1990s. Growth has been robust in
recent years, and although growth in the economy has slowed
between 2001 and 2003, growth has picked up considerably at an
accelerating pace. The average growth rate has been 3.7% over the
past three years. Since the mid-1990s, the export sector has boomed,
serving as the main engine of economic growth. Sweden's exports
have also proven unsurprisingly strong. A marked change in the
structure of exports, in which the service, information technology,
and telecommunications sectors have taken over from traditional
industries such as steel, paper, and pulp, has made the Swedish
export industry less vulnerable to international volatility. However, at
the same time, the Swedish industry has received less money for its
exports while import prices have gone up. The inflation rate for
consumer prices in Switzerland moved over the past 40 years
between -1.1% and 6.5%. For 2019, an inflation rate of 0.4% was
calculated.
During the observation period from 2000 to 2019, the average
inflation rate was 1.7% per year. Overall, the price increase was
97.92 %. An item that cost 100 Franc in 1979 was charged 197.92
Franc in the beginning of 2020.

Overall, the development of inflation was very moderate, while in the

same period there were far greater fluctuations in the euro currency
area. In the years 2009 to 2016, negative inflation rates were even
reached several times, which caused the general price level to
decline and consumer prices to become more favorable. In this case,
one also speaks of deflation, which rarely occurs in other countries.

IV. INFLATION
 V. UNEMPLOYMENT

Unemployment occurs when workers

who want to work are unable to find
jobs, which lowers economic output;
however, they still require
subsistence.
High rates of unemployment are a
signal of economic distress, but
extremely low rates of unemployment
may signal an overheated economy.
Unemployment can be classified as
frictional, cyclical, structural, or
institutional.
Unemployment data are collected and
published by government agencies in
a variety of ways
(from investoppedia.com)
V. UNEMPLOYMENT

During the recession of early 2000, which was

closely related to the economies of Western
Europe and the United States, Switzerland could
not escape this downturn either. The economic
downturn has had a noticeable impact on the
labor market. Many companies declared mass
layoffs and thus the unemployment rate rose
from a low of 1.9% in June 2000 to a peak of
3.9% in October 2004.
Switzerland Unemployment Rate increased to
5.01 % in Dec 2020, from the previously reported
number of 4.88 % in Nov 2020. Switzerland
Unemployment Rate is updated monthly,
available from Jan 1991 to Dec 2020, with an
average rate of 4.10 %. The data reached an all-
time high of 5.49 % in Feb 2010 and a record low
of 1.53 % in Jan 1991. The data is reported by the
Swiss Federal Statistical Office.
In the latest reports, Switzerland Population
reached 8.67 million people in Dec 2020.
Monthly Earnings of Switzerland stood at
5,769.63 USD in Dec 2019. The country's Labour
Force Participation Rate increased to 68.44 % in
Dec 2020.
V. UNEMPLOYMENT
V. UNEMPLOYMENT

Switzerland is a small country with rich cultural and

geographic diversity. The Swiss unemployment rate is
low, at around 4%. The rate has remained at that level
since the year 2000, despite a massive increase in the
foreign labor force, the Great Recession, and a
currency appreciation shock, demonstrating the Swiss
labor market's impressive resiliency. However,
challenges do exist, particularly related to earnings
and employment gaps between foreign and native
workers, as well as a narrowing but persistent gender
pay gap.
V. UNEMPLOYMENT
Overall, Switzerland's labor market is doing well.
Unemployment has remained below 5%, and real
earnings have been growing at a rate of about 0.5%
per year since 2000. This success comes despite a
massive expansion of the labor force of about 23%
since 2000, the Great Recession, and appreciation of
the local currency.

After decades under relatively stable conditions, the

Swiss labor market has faced major challenges since
the turn of the millennium. The establishment of the
free movement of people with the EU in 2002 led to a
massive expansion of the labor force. In addition, the
Swiss economy was burdened by the Great Recession
and the unprecedented appreciation of the Swiss
franc during the eurozone crisis. Despite these
circumstances, low unemployment and steady wage
growth have persisted over the past 20 years.
V. UNEMPLOYMENT

The Swiss labor market has proven

resilient to several large shocks during
2000−2018, for example, the Great
Recession in 2008, a massive inflow of
foreign workers, and a sharp
appreciation of its currency. Despite
these challenges, unemployment
remained stable, and real wages have
been on a steadily increasing path.
VI. CONCLUSION

Overall, the Swiss economy is one of

the most stable in the world. Stable
long-term monetary and security
policies make Switzerland a safe haven
for investors, creating a growing
economy. Due to its small size and
high labor specialization, industry and
commerce are key to the country's
economic life. Switzerland is one of the
countries with high GDP, the highest
per capita income in the world with
low unemployment and balanced
policies. Switzerland's economy ranks
first in the world in the 2015 Global
Innovation Index.
VII. REFERENCES

Datacatalog.worldbank.org. 2021. Data Access and Licensing | Data

Catalog. [online] Available at: <https://datacatalog.worldbank.org/public-
licenses#cc-by%20 > [Accessed 21 May 2021].
Investopedia. 2021. Gross Domestic Product (GDP). [online] Available at:
<https://www.investopedia.com/terms/g/gdp.asp#:~:text=Gross%20Dom
estic%20Product%20(GDP)%20is%20the%20monetary%20value%20of%20
all,expenditures%2C%20production%2C%20or%20incomes > [Accessed
21 May 2021].
Khan Academy. 2021. Lesson summary: Price indices and inflation
(article) | Khan Academy. [online] Available at:
<https://www.khanacademy.org/economics-finance-domain/ap-
macroeconomics/economic-iondicators-and-the-business-cycle/price-
indices-and-inflation/a/lesson-summary-price-indices-and-
inflation#:~:text=Inflation%20is%20an%20increase%20in,pretty%20good
%20job%20of%20this > [Accessed 21 May 2021].
Investopedia. 2021. Unemployment. [online] Available at:
<https://www.investopedia.com/terms/u/unemployment.asp > [Accessed
21 May 2021].
Macrotrends.net. 2021. Switzerland Unemployment Rate 1991-2021.
[online] Available at:
<https://www.macrotrends.net/countries/CHE/switzerland/unemployme
nt-rate > [Accessed 21 May 2021].
Macrotrends.net. 2021. Switzerland Inflation Rate 1960-2021. [online]
Available at:
<https://www.macrotrends.net/countries/CHE/switzerland/inflation-rate-
cpi > [Accessed 21 May 2021].
Ngoinhathuysi.com. 2021. KINH TẾ THỤY SĨ. [online] Available at:
<https://ngoinhathuysi.com/about/kinh-te/kinh-te-thuy-si-137 >
[Accessed 21 May 2021].
Worlddata.info. 2021. Inflation rates in Switzerland. [online] Available at:
<https://www.worlddata.info/europe/switzerland/inflation-rates.php >
[Accessed 21 May 2021].
VII. REFERENCES

Council, T., 2021. Start. [online] Admin.ch. Available at:

<https://www.admin.ch/gov/en/start.html > [Accessed 21 May
2021].
2021. [online] Available at:
<https://www.eda.admin.ch/eda/en/fdfa.html > [Accessed 21 May
2021].
SchengenVisaInfo.com. 2021. Schengen Visa - Comprehensive
information about Europe Visa. [online] Available at:
<https://www.schengenvisainfo.com/ > [Accessed 21 May 2021].
Credit Suisse. 2021. Articles & stories. [online] Available at:
<https://www.credit-suisse.com/about-us/en/articles-stories.html >
[Accessed 21 May 2021].
Credit Suisse. 2021. Media & news. [online] Available at:
<https://www.credit-suisse.com/about-us/en/media-news.html >
[Accessed 21 May 2021].
Office, F., 2021. Work and income. [online] Bfs.admin.ch. Available
at: <https://www.bfs.admin.ch/bfs/en/home/statistics/work-
income.html > [Accessed 21 May 2021].
2021. [online] Available at:
<https://www.eda.admin.ch/aboutswitzerland/en/home.html/en/ec
onomy/workers_and_jobs/trade_unions > [Accessed 21 May 2021].
Ec.europa.eu. 2021. European Commission - Environment. [online]
Available at:
<https://ec.europa.eu/environment/beyond_gdp/index_en.html >
[Accessed 21 May 2021].
Manceaux, J., 2021. Swiss economy: Turning the page after weak
2017. [online] ING Think. Available at:
<https://think.ing.com/snaps/swiss-economy-turning-the-page-of-
a-weak-2017 > [Accessed 21 May 2021].
Heritage.org. 2021. Switzerland Economy: Population, GDP,
Inflation, Business, Trade, FDI, Corruption. [online] Available at:
<https://www.heritage.org/index/country/switzerland > [Accessed
21 May 2021].
Ceicdata.com. 2021. Switzerland Unemployment Rate. [online]
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t-rate > [Accessed 21 May 2021].
 Foundation of Business
Analytics

Thanks for reading

Assignment 6
NUT TEAM

Dang Thuy Nhi

Mai Le Phuong Uyen
Nguyen Huynh Khanh Truc