Abstract
The economy has adapted well to the appreciation that followed the exit from the exchange floor. Growth is expected to reach 11/2 percent this year and to stabilize at around 1¾ percent over the medium term. A resurgence of capital inflows, a sharp adjustment in property prices, renewed concerns over large global banks and changes to Swiss-EU relations pose risks to this outlook. The two-pronged approach to monetary policy helped avert a prolonged slowdown and sustained deflation by limiting further appreciation, with some support from fiscal policy. Elevated exposure to mortgage debt continues, and low interest rates could rekindle a credit-driven upswing in house prices. Population aging and slower immigration will create funding gaps in the public pension system, while minimum mandated interest rates for private pensions that exceed market rates could affect viability. The Swiss systemically-important global banks are continuing to build their financial strength. Corporate tax reform is expected to trim future tax revenue.
Fund Relations
(As of October 28, 2016)
Membership Status: Joined May 29, 1992; Article VIII
| General Resources Account | |||
| SDR Million | Percent Quota | ||
| Quota | 5,771.10 | 100.00 | |
| Fund holdings of currency | 5,758.18 | 99.78 | |
| Reserve position in Fund | 12.94 | 0.22 | |
| New arrangements to borrow | 968.24 | ||
| SDR Department | |||
| SDR Millions | Percent Allocation | ||
| Net cumulative allocation | 3,288.04 | 100.00 | |
| Holdings | 3,256.41 | 99.04 | |
| General Resources Account | |||
| SDR Million | Percent Quota | ||
| Quota | 5,771.10 | 100.00 | |
| Fund holdings of currency | 5,758.18 | 99.78 | |
| Reserve position in Fund | 12.94 | 0.22 | |
| New arrangements to borrow | 968.24 | ||
| SDR Department | |||
| SDR Millions | Percent Allocation | ||
| Net cumulative allocation | 3,288.04 | 100.00 | |
| Holdings | 3,256.41 | 99.04 | |
Outstanding Purchases and Loans: None
Financial Arrangements: None
Projected Payments to Fund:1
(SDR Million; based on existing use of resources and present holdings of SDRs):
| Forthcoming | |||||
| 2016 | 2017 | 2018 | 2019 | 2020 | |
| Principal | |||||
| Charges/Interest | 0.00 | 0.13 | 0.13 | 0.13 | 0.13 |
| Total | 0.00 | 0.13 | 0.13 | 0.13 | 0.13 |
| Forthcoming | |||||
| 2016 | 2017 | 2018 | 2019 | 2020 | |
| Principal | |||||
| Charges/Interest | 0.00 | 0.13 | 0.13 | 0.13 | 0.13 |
| Total | 0.00 | 0.13 | 0.13 | 0.13 | 0.13 |
Exchange Rate Arrangement:
The de jure exchange rate arrangement is free floating. The exchange rate of the Swiss franc is determined by market forces in the foreign exchange market, and all settlements are made at free market rates. On January 15, 2015, the SNB ended the exchange rate floor of CHF 1.20 per euro, and the franc has since been floating. However, the SNB may intervene in the foreign exchange market. The SNB publishes information regarding its foreign exchange transactions in its annual accountability report. The de facto exchange rate regime is a floating arrangement as the exchange rate has been floating between 0.97 and 1.12 CHF per euro, with occasional SNB intervention, following the removal of the floor.
Switzerland has accepted the obligations of Article VIII, Sections 2, 3, and 4, and maintains a system free of restrictions on the making of payments and transfers for current international transactions except for restrictions in place for security reasons notified to the Fund pursuant to Decision No. 144-(52/51).
On May 13, 2016, Switzerland notified the IMF of the exchange restrictions that have been imposed against certain countries, individuals, and entities, in accordance with relevant UN Security Council resolutions and EU regulations.
Latest Article IV Consultation: The last Article IV consultation was concluded on March 23, 2015, with the staff report published on May 27, 2015. Switzerland is on the standard 12-month consultation cycle.
Technical Assistance: None
Resident Representatives: None
Financial System Stability Assessment Update and ROSCs:
A Financial System Stability Assessment Update was conducted in 2013–14, and the report was issued on May 28, 2014.
Reports on the Observance of Standards and Codes (Basel core principles, IAIS core principles, and IOSCO objectives and principles) were conducted in 2013–14, and the report was issued on May 28, 2014.
Statistical Issues
(As of October 2016)
| General: Data provision is adequate for Fund surveillance. Switzerland publishes timely economic statistics and posts most of the data and the underlying documentation on the internet. |
| National Accounts: National Accounts are timely (including the expenditure, production and income approaches). GDP by canton and a detailed disaggregation of GDP by industry are published with a significant lag, however, with 2014 data being released in late 2016. Responsibility for national accounts compilation is split between two different agencies: quarterly national accounts are published by the State Secretariat for Economic Affairs, and annual national accounts are published by the Federal Statistics Office. |
| Price Statistics: Consumer price indices and producer and import price indices are collected by the Federal Statistical Office. They are published monthly with a base period of December 2015. The Federal Statistical Office is developing additional producer price indexes for services and construction (currently published just twice a year). A comprehensive producer price index is expected to be compiled in the near future. |
| Government Finance Statistics: General government finance statistics are compiled by the Federal Finance Administration. Data for general government are finalized with a considerable lag, mainly due to delays in compiling fiscal accounts at the level of cantons and communes. Data that are available through 2014 remain of a provisional nature due to ongoing efforts to reconcile data with the Swiss system of national accounts. Revisions may result in changes to the data due to coverage, valuation, and recording of transactions associated with the restructuring and funding of public sector pension funds and payment of retirement benefits. It is planned to publish final data after concluding the reconciliation exercise in the summer of 2017. The Swiss National Bank publishes statistics on outstanding and new bond issues by the Swiss confederation. |
| Monetary and Financial Statistics: The Swiss National Bank reports monetary statistics for the monetary authorities, deposit money banks, and other banking institutions for publication in the IMF’s International Financial Statistics on a monthly basis. However, data are reported using report forms that are not fully consistent with the Standardized Report Forms developed based on the IMF’s Monetary and Financial Statistics Manual. |
| Financial sector surveillance: Switzerland reports 12 core Financial Soundness Indicators (FSIs) and 9 additional FSIs for deposit takers, and 3 FSIs for real estate markets. All FSIs are reported on an annual basis. The FSI data and metadata have been posted on the IMF’s FSI website. |
| External sector statistics: BOP and international investment position data are published based on the sixth edition of the IMF’s Balance of Payments and International Investment Position Manual (BPM6). Official data in BPM6 format are available from 1999 onwards. To ensure that new and old data are comparable and to ensure that data users have long data series at their disposal, the SNB formally reclassified the old data series in line with BPM6. Switzerland reports to the IMF annual data on the Coordinated Direct Investment Survey and semi-annual data on the Coordinated Portfolio Investment Survey. |
| In June 1996, Switzerland subscribed to the IMF’s Special Data Dissemination Standard (SDDS), and its metadata are currently posted on the Dissemination Standards Bulletin Board. Switzerland is in full observance of SDDS requirements, and is availing itself of the SDDS’s flexibility options on dissemination of production index data (for periodicity and timeliness) and of wages and earnings data (for periodicity). The Swiss Federal Council has announced its support for Switzerland’s participation in the IMF’s extended statistical standard SDDS Plus. Implementing the requirements of SDDS Plus in Switzerland—a task in which an interagency working group (SIF, SNB, FSO, FFA, FSIO, SECO, and FINMA) plays an active role—will take several years. |
| General: Data provision is adequate for Fund surveillance. Switzerland publishes timely economic statistics and posts most of the data and the underlying documentation on the internet. |
| National Accounts: National Accounts are timely (including the expenditure, production and income approaches). GDP by canton and a detailed disaggregation of GDP by industry are published with a significant lag, however, with 2014 data being released in late 2016. Responsibility for national accounts compilation is split between two different agencies: quarterly national accounts are published by the State Secretariat for Economic Affairs, and annual national accounts are published by the Federal Statistics Office. |
| Price Statistics: Consumer price indices and producer and import price indices are collected by the Federal Statistical Office. They are published monthly with a base period of December 2015. The Federal Statistical Office is developing additional producer price indexes for services and construction (currently published just twice a year). A comprehensive producer price index is expected to be compiled in the near future. |
| Government Finance Statistics: General government finance statistics are compiled by the Federal Finance Administration. Data for general government are finalized with a considerable lag, mainly due to delays in compiling fiscal accounts at the level of cantons and communes. Data that are available through 2014 remain of a provisional nature due to ongoing efforts to reconcile data with the Swiss system of national accounts. Revisions may result in changes to the data due to coverage, valuation, and recording of transactions associated with the restructuring and funding of public sector pension funds and payment of retirement benefits. It is planned to publish final data after concluding the reconciliation exercise in the summer of 2017. The Swiss National Bank publishes statistics on outstanding and new bond issues by the Swiss confederation. |
| Monetary and Financial Statistics: The Swiss National Bank reports monetary statistics for the monetary authorities, deposit money banks, and other banking institutions for publication in the IMF’s International Financial Statistics on a monthly basis. However, data are reported using report forms that are not fully consistent with the Standardized Report Forms developed based on the IMF’s Monetary and Financial Statistics Manual. |
| Financial sector surveillance: Switzerland reports 12 core Financial Soundness Indicators (FSIs) and 9 additional FSIs for deposit takers, and 3 FSIs for real estate markets. All FSIs are reported on an annual basis. The FSI data and metadata have been posted on the IMF’s FSI website. |
| External sector statistics: BOP and international investment position data are published based on the sixth edition of the IMF’s Balance of Payments and International Investment Position Manual (BPM6). Official data in BPM6 format are available from 1999 onwards. To ensure that new and old data are comparable and to ensure that data users have long data series at their disposal, the SNB formally reclassified the old data series in line with BPM6. Switzerland reports to the IMF annual data on the Coordinated Direct Investment Survey and semi-annual data on the Coordinated Portfolio Investment Survey. |
| In June 1996, Switzerland subscribed to the IMF’s Special Data Dissemination Standard (SDDS), and its metadata are currently posted on the Dissemination Standards Bulletin Board. Switzerland is in full observance of SDDS requirements, and is availing itself of the SDDS’s flexibility options on dissemination of production index data (for periodicity and timeliness) and of wages and earnings data (for periodicity). The Swiss Federal Council has announced its support for Switzerland’s participation in the IMF’s extended statistical standard SDDS Plus. Implementing the requirements of SDDS Plus in Switzerland—a task in which an interagency working group (SIF, SNB, FSO, FFA, FSIO, SECO, and FINMA) plays an active role—will take several years. |
Switzerland: Table of Common Indicators Required for Surveillance
(As of October 28, 2016)
Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Switzerland: Table of Common Indicators Required for Surveillance
(As of October 28, 2016)
| Date of Latest Observation | Date Received | Frequency of Data7 | Frequency of Reporting7 | Frequency of Publication7 | |
| Exchange Rates | Same day | Same day | D and M | M and M | D and M |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | Aug 16 | Sep 16 | M | M | M |
| Reserve/Base Money | Aug 16 | Sep 16 | M | M | M |
| Broad Money | Aug 16 | Sep 16 | M | M | M |
| Central Bank Balance Sheet | Sep 16 | Oct 16 | M | M | M |
| Consolidated Balance Sheet of the Banking System | Oct 16 | Oct 16 | M | M | M |
| Interest Rates2 | Same day | Same day | D and M | M and M | D and M |
| Consumer Price Index | Sep 16 | Oct 16 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3 – General Government4 | 2013 | Jul 16 | A | A | A |
| Revenue, Expenditure, Balance and Composition of Financing3– Central Government | Feb 2016 | Jul 16 | M | M | M |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | Q2/16 | Sep 16 | Q | Q | Q |
| External Current Account Balance | Q2/16 | Sep 16 | Q | Q | Q |
| Exports and Imports of Goods and Services | Sep 16 | Oct 16 | M | M | M |
| GDP/GNP | Q2/16 | Sep 16 | Q | Q | Q |
| Gross External Debt | Q2/16 | Sep 16 | Q | Q | Q |
| International Investment Position6 | Q2/16 | Sep 16 | Q | Q | Q |
Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
Switzerland: Table of Common Indicators Required for Surveillance
(As of October 28, 2016)
| Date of Latest Observation | Date Received | Frequency of Data7 | Frequency of Reporting7 | Frequency of Publication7 | |
| Exchange Rates | Same day | Same day | D and M | M and M | D and M |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | Aug 16 | Sep 16 | M | M | M |
| Reserve/Base Money | Aug 16 | Sep 16 | M | M | M |
| Broad Money | Aug 16 | Sep 16 | M | M | M |
| Central Bank Balance Sheet | Sep 16 | Oct 16 | M | M | M |
| Consolidated Balance Sheet of the Banking System | Oct 16 | Oct 16 | M | M | M |
| Interest Rates2 | Same day | Same day | D and M | M and M | D and M |
| Consumer Price Index | Sep 16 | Oct 16 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3 – General Government4 | 2013 | Jul 16 | A | A | A |
| Revenue, Expenditure, Balance and Composition of Financing3– Central Government | Feb 2016 | Jul 16 | M | M | M |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | Q2/16 | Sep 16 | Q | Q | Q |
| External Current Account Balance | Q2/16 | Sep 16 | Q | Q | Q |
| Exports and Imports of Goods and Services | Sep 16 | Oct 16 | M | M | M |
| GDP/GNP | Q2/16 | Sep 16 | Q | Q | Q |
| Gross External Debt | Q2/16 | Sep 16 | Q | Q | Q |
| International Investment Position6 | Q2/16 | Sep 16 | Q | Q | Q |
Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.