Swiss wages up
ZURICH, SWITZERLAND – Markets let the Swiss franc slip slightly Wednesday 14 December while awaiting news from the Swiss National Bank 15 December, which will share its monetary policy assessment in the morning.
Some analysts are predicting the central bank will raise the cap from CHF1.20 to the euro to CHF1.25 or higher, to help exporters. Others are insisting the SNB will not budge from the CHF1.20 mark and yet others are speculating that interest rates, at historic lows, will move into the negative.
2010 saw Swiss companies investing more abroad, foreign investors slowing their capital inflows
The SNB Tuesday 13 December published its 2010 direct investment and Swiss international investment position reports, where it made it clear that the continuing high franc was already taking its toll on investments last year. Swiss companies invested more abroad while foreign direct investors in Switzerland showed a 32 percent drop in capital inflows.
Zurich's new Prime Tower, just opened: fully occupied, despite gloomy economic news - a sign of faith in the turnaround?
BERN, SWITZERLAND – The Swiss Secretariat for the Economy, Seco, has revised downward its GDP growth projections for 2012, from 0.9 percent forecast in September to 0.5 percent, following a trend set by major banks’ and others’ research departments. A major impact will be a significant rise in unemployment, Seco notes.
The jobless rate is expected to peak at 3.9 percent at the end of 2012, then slip back down, with annual rates of 3.1 percent in 2011 (currently 3 percent), 3.6 percent in 2012 and 3.7 percent in 2013.
Bern has qualified the economy’s situation as experiencing “a clear slowdown”, but notes that nothing indicates “a bottoming-out similar to what was seen at the end of 2008″, with the global impact of the Lehman Brothers crash, nor is a rapid degradation expected. The accumulated negative impact of the strong Swiss franc, now at CHF1.23 to the euro, is putting the brakes on investment and exports.
The good news is that the slowdown is expected to be temporary, assuming the eurozone debt crisis does not worsen, and in 2013 Swiss GDP growth is forecast to rise again, to 1.9 percent.
Sovereign debt crises in a number of countries, notably in the eurozone, and flagging consumer confidence as well as corporate investment confidence are key factors behind the expected slowdown. Seco’s Group of Experts who are consulted for the official government quarterly forecasts agree that an “uncontrollable contamination” from the eurozone can be avoided, with financial markets recovering bit by bit throughout 2012.
Seco points to the slight improved situation outside the eurozone, with the US’s “vacillating” situation stabilizing somewhat in the second half of 2011, Japan gradually improving and emerging economies recovering from the initial impact of the rest of the world’s economic woes.
ZURICH, SWITZERLAND – Credit Suisse Thursday pushed its GDP growth forecast down sharply, from 2 percent to 0.5 percent, for 2012. The bank points to the euro crisis, which “continues to weigh on markets, with economic momentum in Europe fading unexpectedly quickly.” Switzerland will be hurt by the fall in exports due to “decidedly gloomier” prospects for countries to which the Swiss export, and the accompanying fall in capital investment on new machinery and equipment.
Consumers and the construction industry, which continues to boom thanks to low interest rates, will prop up economic growth, the bank’s analysts say.
Renovations, new construction: building industry and consumption will prop up Swiss economy in 2012
But “a significant cooling of European growth is no longer avoidable”, according to Credit Suisse, and “while the US economy has accelerated again slightly following the dip seen in mid-2011, the opposite is occurring in Europe. Most significantly, economic momentum in Germany – Switzerland’s key trading partner – has slowed. At the same time, the partial spillover of the debt crisis to Italy has brought increased volatility on the financial markets, growing tensions on the credit and interbank markets, and falling confidence among households and businesses.”
Sentiment is more of an issue than home-grown problems, the bank notes, pointing out that Swiss public finances and companies do not have excess debt.
“On the contrary, interest rates in Switzerland will remain low until at least the end of 2012. In addition, inflation is not an issue in Switzerland at present; pressure on consumer prices is holding up, so purchasing power is safeguarded (inflation in 2012: 0.4%). Finally, immigration is likely to remain strong, meaning an important driver of the growth in consumption will remain in place. By contrast, the constant talk of crisis, together with a deterioration in the labor market situation (unemployment rate in 2012: 3.3%), is increasingly impacting sentiment, and poses certain constraints for the growth in consumption.”
Funds to help companies cover the cost of partial unemployment
BERN, SWITZERLAND – The two houses of parliament have given the green light to government measures to fight the high franc, with the lower house Wednesday approving the Federal Council’s CHF870 million project.
The bulk of the funds will go to help companies cover the cost of partial unemployment that is likely to rise as exports fall. The unemployment fund is being allotted a ceiling of CHF500 from the package, money that may not be needed.
Smaller amounts target specific areas, such as innovative products in the tourism sector and transformed agricultural products.
Trade figures for August, released Wednesday, show exports down 4.1 percent and imports down 6.2 percent, although exports grew by just over 1 percent when figures are corrected for inflation. Exports have grown by 2.6 percent since the start of 2011, but the increase has relied on only three business sectors: watchmaking, machinery and electronics, metal-working.
The State Secretariat for the Economy lowered its GDP growth forecast Wednesday, to 1.9 percent for 2011 and 0.9 percent, from earlier projections of 2.1 and 1.5 percent respectively.
Switzerland had 1.6 percent more cars in 2010 than in 2009, but gasoline consumption was down, in favour of diesel and renewable source products (here: electric car at the Grimsel pass)
BERN, SWITZERLAND – Switzerland consumed 4.4 percent more energy in 2010, including a 4 percent increase for electricity, says the Swiss Federal Energy Office.
Three main factors contributed to the rise, it notes in a statement issued Tuesday 28 June: continuing population growth, economic growth with industrial consumption up, and colder weather than usual during the 2010-11 winter.
Degree-days of heating were up 12.7 percent compared to 2009. GDP grew 2.6 percent in 2010 compared to a fall of 1.9 percent the previous year. And the population grew 1 percent during the year, with 1.6 percent more vehicle owners.
GENEVA, SWITZERLAND – Figures issued Thursday 19 May by the Japanese government show that after struggling in the post-earthquake weeks, the country’s economy has now slipped officially into recession, often defined by economists as two quarters running of falling GDP. Real GDP (gross domestic product) was down 0.9 percent for the first quarter, or 3.7 percent at an annualized rate, the cabinet office announced, with factory output slowing significantly.
AP reports that the quarterly figures include only 20 days that followed the earthquake in March. But it points out that with 24,000 people dead or missing, and the world’s most costly natural disaster estimated to have cost $300 billion in damages, the impact of the earthquake on the economy was massive.
The Financial Times notes that “the decline follows a contraction in the final quarter of last year and will probably strengthen calls for greater government spending on relief and reconstruction, despite widespread worries about the impact of the extra borrowing required on an already highly indebted state.”
photo: Xavier Haepe / wikipedia (flickr.com/people/vier)
Geneva, Switzerland (GenevaLunch) – The European Union’s frayed edges were showing Tuesday 26 April as governments and their citizens absorbed the newly published figures for sovereign debt and deficits, some worse than expected, while Italy and France called for reforms of Schengen rules in the face of massive immigration from North Africa.
Eurostat, the statistical office for the European Union, published 2010 figures for the euro area and the 27-member area, showing the five countries with the largest deficits (budget spending outstripping revenues) in terms of percentages of GDP (gross domestic product) to be: Ireland (32.4%), Greece (10.5%), the United Kingdom (10.4%), Spain (9.2%) and Portugal (9.1%). Greece had agreed not to let its deficit go deeper than 9 percent, the BBC points out.
Deficits on the whole decreased in 2010 compared to 2009 while debt and GDP increased, says Eurostat.
Five countries above 90%, debt ratio to GDP
Government debt (amount owed long-term by the government) declined as a whole but the debt ratio to GDP remained at significantly high levels for several countries.
“Fourteen Member States had government debt ratios higher than 60% of GDP in 2010: Greece (142.8%), Italy (119.0%), Belgium (96.8%), Ireland (96.2%), Portugal (93.0%), Germany (83.2%), France (81.7%), Hungary (80.2%), the United Kingdom (80.0%), Austria (72.3%), Malta (68.0%), the Netherlands (62.7%), Cyprus (60.8%) and Spain (60.1%).”
US, Swiss debt ratio compared to European ratios
The US debt, by comparison, is about 97 percent of GDP, a fact emphasized by the warning issued by S&P’s 18 April on the federal debt.
Switzerland’s federal debt was about 20 percent of GDP in early 2010, and with communal and cantonal debt added in, it stood at about 40 percent, well below the G20 average (closer to 100) and the average of most of Europe. Reuters, in December 2010, reported that Bern “expects Switzerland’s overall public debt to fall to around 37 percent of gross domestic product according to international standards next year [2011], less then half of the rate predicted by the OECD for the euro zone.”
Government spending decreased in 2010 in the two zones as a whole, while revenues were essentially static: “Government expenditure in the euro area was equivalent to 50.4% of GDP and government revenue to 44.4%. The figures for the EU27 were 50.3% and 44.0% respectively. In both zones, the government expenditure ratio decreased between 2009 and 2010, while the government revenue ratio remained almost unchanged.”
British military spending data questioned
Two countries prompted “reservations”, Romania and Great Britain, the latter for concerns over its reporting of military spending: “Eurostat is expressing a reservation on the quality of the data reported by the United Kingdom, due to uncertainties on the time of recording of military expenditure. The United Kingdom does not record military expenditure on a delivery basis, as required by the relevant Eurostat Decision of 9 March 2006.”
EU figures compared to Switzerland, USA
The warning by S&P’s 18 April on the US federal debt underscored it’s
Schengen rules don’t fit current situation, France and Italy argue
France and Italy, which have been at odds over how to handle large numbers of North Africans flowing across Europe’s southern borders, joined forces Tuesday on the occasion of a French-Italian summit. Leaders Nicolas Sarkozy and Silvio Berlusconi have jointly sent off a letter to Brussels, they said, underscoring their commitment to the Schengen agreement on the free movement of people but insisting that the agreement needs to be reformed.
They did not specify what this would involve, but they cited the exceptional circumstances caused by events in North Africa, according to Le Monde (Fr).
Complete table, by country, from Eurostat
The Greek dilemma, Economist, 26 April 2011
Source: Swiss National Bank, 17 March 2010 (click on image to view larger)
Zurich, Switzerland (GenevaLunch) - Switzerland’s GDP has been revised upward for 2011, the Swiss National Bank (SNB) announced 17 March, in a relatively upbeat forecast with summary of economic conditions.
Swiss economic recovery “more dynamic” than anticipated
“In spite of the marked appreciation of the Swiss franc, the economic recovery in Switzerland recently proved to be more dynamic than anticipated. GDP growth again exceeded potential growth and was broad based,” the SNB notes in a press release. “Demand for labour has firmed, resulting in a renewed drop in unemployment and short-time work. Despite the noticeable dampening effect of the Swiss franc appreciation, the continued positive business expectations suggest favourable developments in the coming months.”
Interest rates to remain low
Interest rates will remain at their low level, with the SNB noting that it is “leaving the target range for the three-month Libor rate [the rate charged to prime banks] unchanged at 0.0–0.75 percent, and intends to keep the Libor within the lower part of the target range at around 0.25%.”
Global outlook, impact
The SNB’s forecasts are based on prospects for the Swiss economy that “have improved since the last quarter” thanks to a stronger than predicted global economic recovery. “However, continuing debt problems in Europe and the possible dampening effects of high oil prices on economic activity pose considerable downside risks. In addition, the consequences of the earthquake catastrophe in Japan are, at this stage, difficult to assess.”
Geopolitical tensions and rising commodity and food prices will “lead to upside risks to inflation across the globe. Survey data show however that inflation expectations in Switzerland remain stable.”
The impact of the current strong Swiss franc will have a “moderating” impact on the inflation forecast in mid-2012, the SNB says.
Source: Swiss National Bank, 17 March 2010
Estonia 1 January became the 17th nation to adopt the euro as its currency, with Prime Minister Andrus Ansip taking cash out of an automatic teller machine as the changeover took place. It is the only former Soviet Union country that is part of the zone. Its GDP of 14 billion euros makes it the second smallest euro partner, with only Malta having a smaller economy, among the group, according to Bloomberg.
Piercing the national debt, a slow but steady process in Switzerland
Bern, Switzerland (GenevaLunch) - The Swiss federal finance department, in publishing 9 December its calendar of government bonds issuance for 2011, noted that it will pay back CHF0.6 billion next year, as part of its ongoing national debt reduction programme, in contrast to the heavy debt burdens of many of its European neighbours. If more money flows into government coffers than is budgeted, the debt could be reduced further.
Wednesday in Geneva the head of the IMF, Dominique Strauss-Kahn, told a United Nations forum that “we’re far off the mark in terms of financial governance,” noting that the Greek and Irish debt crises have demonstrated the need for crisis resolution tools, reports AFP.
The finance ministry says Bern will borrow only CHF7b through new bonds, while repaying CHF7.6b. Swiss GDP in recent months shows a recovery from the global economic crisis, with the likelihood of a boost in federal revenue, compared to the amount budgeted.
The Swiss debt in 2009, announced at the end of April 2010, was CHF111 billion, down by CHF20b from the 2005 debt. The country embarked on a belt-tightening programme that year to reduce the national debt, which had been growing steadily.
Links to other sites: Reuters (which carries a lengthy article on the health of the Swiss economy compared to its neighbours’), Swiss National Bank
“Bleak” exports will nevertheless dampen economy in 2011
Swiss exports are likely to suffer i n 2011
Bern, Switzerland (GenevaLunch) – Switzerland’s growth forecast for 2010 has been raised from 1.8 to 2.7 percent by the government’s Expert Group on Economic Forecasts, but it is expected to slide again in 2011 to 1.2 percent due to a “bleak” exports situation next year. Slowing growth internationally coupled with a high Swiss franc will hurt exports.
“The assessment that a normal recovery in the world economy is being hindered by side effects from the financial crisis has been generally confirmed,” the group states in its quarterly forecast. Recovery from the global crisis has been relatively good in the past year mainly because of “extremely expansive monetary and fiscal policies” according to the expert group, but “signs are increasingly showing that the world economy has switched into a lower gear over the last few months.
The cooling of the economy should gain strength in many countries over the next few quarters.” The euro zone has fared better than initially expected but “European growth prospects remain modest against the background of the slowing world economy,” the report argues.
Switzerland has had strong GDP (gross domestic product) growth in the first two quarters of 2010. “In contrast to most OECD countries, Swiss economic output had reached it pre-recession levels by mid-2010.
China now appears likely to be the world’s second largest economy in 2010, after the US, based on GDP (gross domestic product); it had already overtaken Japan for quarterly growth by the end of 2009. It has held the number two position since 1968, when it took it over from West Germany. The latest quarterly figures for Japan show slow growth for the second quarter, only 0.4 percent (annualized, with seasonal adjustments), while China continues to grow steadily. Official figures for both will be available only at the end of 2010, but the Financial Times reports that figures released 16 August are well below the 2.3 percent growth rate expected by most analysts. The economies are difficult to compare for a number of reasons, and China is generally considered to under-report its growth, but the latest figures confirm the trend that China’s influence is outstripping that of Japan.
Links to other sites: New York Times, Guardian, UK, Xinhua
The UK economy picked up in the second quarter of 2010, thanks in large part to the biggest rise in construction in nearly 50 years. New figures published by the Office for National Statistics Friday 23 July show a 1.1 percent GDP increase over the previous quarter, the largest such quarterly rise in four years, and a 1.6 percent increase over the same period a year earlier.
Links to other sites: Financial Times, Reuters
Ireland’s economy is now expected to grow by at least 1 percent this year, following the good news Wednesday 30 June that the country is moving out of recession: after eight quarters of negative GDP growth, the country saw growth of 2.7 percent in the first quarter. Over the past two years Ireland’s GDP has fallen by some 15 percent.
Ireland was the first economy in the eurozone to slip into recession and suffered eight consecutive quarters of negative GDP growth. GNP negative growth was even worse, falling by over 17 percent.
The good news was accompanied by bad, however, with the unemployment rate in Ireland rising to 13.4 percent.
Links to other sites: CNN, Irish Times
GDP figures posted for the UK Friday morning were 0.2 percent growth, half the 0.4 percent figure widely predicted, and British Prime Minister Gordon Brown warned of the possibility of a double-dip recession, with the country not long out of its 2009 recession.
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.
