Monday 15 February is popularly known as Presidents Day in the US, with many businesses and government offices shut. The holiday is officially called Washington’s Birthday, to celebrate the first president of the US, but when it was moved from 22 February to the third Monday in the month, going into effect in 1971, President Richard Nixon called it Presidents Day, to honour all US presidents. The label stuck, albeit informally.
China has begun its week-long celebration of the Chinese New Year, with its stock markets and businesses closed to celebrate the arrival of the Year of the Tiger.
The Year of the Tiger looks likely to be the year China slips into second place as a world economic power. Japan published figures Monday that show it remains the world’s second largest economy, with GDP (gross domestic product) of $5.085 trillion. The figure for China is $4.909t. China is expected to overtake Japan during 2010 but it will need another 20 or more years to catch up with the US, whose economy is three times the size of China’s, many analysts suggest.
Links to other sites: Vancouver Sun, US Mission in Germany, Xinhua
Zurich, Switzerland (GenevLunch) – Interest rates will stay low, continuing the policy of monetary expansion, Switzerland’s central bank announced 10 December. The Swiss National Bank argues that the economic recovery is still too fragile to warrant a rise in interest rates which will remain in a range of 0-0.75 percent for the three-month Libor. The bank says it will keep rates at the lower end of this band, and will intervene decisively to maintain the Swiss franc stable against the Euro.
It also announced it was suspending its purchases of Swiss franc bonds issued by private sector companies, a measure introduced to provide the market with liquidity.
Swiss army knives and more, still selling
Geneva, Switzerland (GenevaLunch) - The canton of Geneva moved out of its recession and into growth by the second quarter of 2009, six months ahead of the rest of Switzerland, and it now looks set to have a GDP (gross domestic product) of CHF45 million, growth of 0.5-1 percent in 2010, predicts the BCGE (Banque Cantonale de Geneve). The growth is closely linked to Geneva’s strong ties with Asian trading partners, but retail businesses have remained strong throughout the recession, and consumers are expected to lead the way with 3.5 percent growth in this area, followed by services (health, education, government and semi-public business), which account for 20 percent of cantonal GDP.
Banks are expected to show zero growth and therefore have a neutral impact on the canton’s GDP growth figures next year.
Links to other sites: BCGE, Tribune de Geneve
Exports, port of Basel
Update 11:40 Bern, Switzerland (GenevaLunch) – Switzerland officially moved out of recession in the third quarter of 2009, Bern announced Tuesday 1 December. Real GDP (gross domestic product) was up 0.3 percent compared to the previous quarter. Private consumption (+0.6 percent) and building investments both grew, and healthcare plus the financial and insurance industries also rose. Investments were up “massively”, with industrial goods investments rising by 5.5 percent.
The government’s own “consumption expenditure” rose by 1.3 percent.
Exports of goods and services both climbed, by 2.2 and 0.3 percent respectively, for the first time “after a considerable one-year slide” the government statement reports.
National debt: It just got a little less deep
Bern, Switzerland (GenevaLunch) – Switzerland’s debt decreased to CHF119 billion in the second quarter 2009, about CHF2.8b less than at the beginning of the year, according to figures released by the Swiss Federal Department of Finance 29 September. Swiss government debt is 22 percent of gross domestic product (GDP). This increases to 41 percent if all public debt is taken into account, including cantons and communes, but still less than the average for most G-8 countries.
Public debt may decrease CHF2b more before the end of the year if the federal government exercises its right to sell the convertible bonds it bought from UBS to prop the bank up.
Source: Swiss customs office (click on image to view larger)
Bern, Switzerland (GenevaLunch) – Several economic indicators published by the Swiss federal government Tuesday 21 September show an economy still in the doldrums, but with the outlook slightly more optimistic than in August 2009. Exports are down and imports are down by an even larger percentage, the economy is stabilizing but will remain “sluggish” in 2010 and unemployment is high. The good news: while the picture is still gloomy, it’s getting a little brighter.
GDP growth positive, if only slightly, in 2010
The government’s economic advisory “Expert Group” released its latest quarterly projections, which include a “weaker decline” of GDP (gross domestic product), from -2.7 percent expected in June to -1.7 percent forecast now. The group now expects positive GDP growth in 2010 of 0.4 percent rather than the -0.4 percent projected earlier. Private consumption and building investment are holding relatively steady, which is helping Switzerland to have a recession less dramatic than in many countries, although 2009 will go down as the worst year since 1975 for GDP decline.
We're all connected: Swiss economic health depends on the world, says SNB
Zurich, Switzerland (GenevaLUnch) - The Swiss National Bank’s (SNB) is guardedly more optimistic than in June about the outlook for the Swiss economy, it said Thursday afternoon 17 September in its quarterly report, but monetary policy will remain loose in order to stimulate the economy. The central bank revised its GDP (gross domestic product) forecast, saying it expects this to fall by between 1.5 and 2 percent, less steeply than forecast in June (2.5 to 3 percent). The key interest rate range remains unchanged at 0.0-0.75, “still aiming to keep the Libor within the lower end of this range, that is, at approximately 0.25%.” The Libor serves as an indicator of shifts in bank lending rates.
The SNB says it will continue to intervene in currency markets to keep the Swiss franc competitive internationally.
Health care debate (cartoon: © 2009 Patrick Chappatte)
New York, USA (GenevaLunch) – Economist and Nobel laureate Paul Krugman, writing in the New York Times (registration required) 17 August says of President Barack Obama’s proposed health plan that “it most resembles the system in Switzerland.” More pointedly, he says that unlike what many, including Fox News, would like the public to believe, the plan will not turn the US into a Soviet Union or a distorted version of Britain, but rather: “the truth is that the plans on the table would, roughly speaking, turn America into Switzerland – which may be occupied by lederhosen-wearing holey-cheese eaters, but wasn’t a socialist hellhole the last time I looked.”
Obamacare, he says, “is a plan to Swissify America, using regulation and subsidies to ensure universal coverage.”
Krugman has pointed to this similarity several times recently, prompting debate over how well the US could adopt the Swiss mandatory and well-regulated but largely private system, but facts about the Swiss system are few on the ground in the US debate.
The Chinese economy grew by 7.9 percent in the first half of 2009, showing a recovery after slipping to 6.1 percent for the first quarter. The government says it now expects to be on target and finish the year with growth of around 8 percent. The country’s GDP (gross domestic product) reached US$2.06 trillion. Financial Times, Reuters, Xinhua
Bern, Switzerland (GenevaLunch) – The Swiss Finance Department Tuesday 14 July published its annual figures on the financial and insurance industries, awaited with more interest than usual. The most startling numbers for 2008 show the fall in the value of client securities managed: down from CHF5,2325 billion in 2007 to CHF3,847b in 2008. The drop reflects the decline in the stock market, which at the end of 2007 had a value of CHF1,187 billion but by the end of 2008 it stood at CHF774b.
Bern, Switzerland (GenevaLunch) – Switzerland’s gross domestic product (GDP) fell by 0.8 percent in the first three months of 2009 compared to the last quarter of 2008. The drop was 2.4 percent compared to the same period in 2008. Foreign trade was the main culprit, says the federal government: exports of goods fells by 6.6 percent and of services by 2.3 percent.
Updated 12:30 Bern, Switzerland (GenevaLunch) – Preliminary figures for Swiss gross domestic product (GDP) growth in 2008 show 1.6% growth (at constant previous year prices) and 3.9% at current prices, based on averages of the four quarters. The estimated figures were released 3 March with Bern’s fourth quarter GDP report. But Q4 figures showed a fall, the second quarterly slip in a row, technically putting Switzerland into a recession (TSR, Fre).
Figures published 30 January show the US economy contracting 3.8% at an annual rate, the worst slide in the economy since 1982, with the drop in consumer spending the biggest post-war fall. Inventories kept the figures from being worse. Bloomberg, Financial Times
Switzerland (GenevaLunch) – The latest findings by the London-based Centre for New Economics, best known for its 2006 Happy Planet Index, show the Irish coming in first for happiness and the Swiss second, in Europe, with the UK in a mediocre 13th place out of 22 countries studied, while France hovers near the bottom. The findings were based on data from the European Social Survey of 40,000-plus people in 2006-07, before the impact of the global economic downturn. They are part of a report published 24 January, “National Accounts of Well-being: bringing real wealth onto the balance sheet.” The group has also created a website for its national accounts work.
Cozy indoors, spectacular outdoors: happiness factors?
The Swiss have one of the highest senses of well-being in Europe, according to the report, because the scores for personal and social well-being are both high. Its ranks fourth in Europe in terms of well-being at work. It scores a little lower than first-place Denmark in all categories except for self-esteem and vitality, where Switzerland is higher.
Happiness studies are not new. Journalist Eric Weiner, international correspondent for National Public Radio for 10 years, in early 2008 told CNN that Switzerland was one of his favourite happiness countries because things like trains operating on time and the high level of chocolate consumption seemed to add to the nation’s contentedness. His measures were clearly subjective, for his book The Geography of Bliss: One Grump’s Search for the Happiest Places in the World. Other authors have pursued the source of happiness, seeking to understand the value of it.
The National Accounts of Well-being takes the desire to understand how happiness works to another level by measuring 8 groups of indicators that fall into three categories, social well-being, personal well-being and well-being at work. It argues that measuring a country’s success by its GDP gives only a partial picture of the reality. The accounts should be used by national policy-makers, its authors argue.
”The second world war led to an emphasis on productivity, which led in turn to the overwhelming concentration by governments on economic national accounting indicators such as Gross Domestic Product (GDP) as measures of success. Yet these economic indicators offer a very narrow view of human well-being.
”While a strong and healthy economy may be desirable, it is desirable because it allows us to get on with doing the things that are really important: living happy, fulfilling lives. Modern society is organized around the core assumption of classical economists that continual economic growth is desirable because it delivers improved human well-being. But evidence shows this is only true to a limited extent.”
Blue skies and scenery were not measured, but could play a role
The self-described “think and do tank” works in three fields: well-being, ghost and clone towns in Britain and “real economics.”
The 68-page report can be downloaded from the National Accounts web site.
