Economically speaking, Switzerland is one of the most stable countries in the world, with a GDP that has been fairly steady for the last few years. The country is ranked among the 20 largest economies in the world. Its GDP per capita even ranks fourth on a global scale. In 2017, economic growth amounted to 1.7 percent, a slump that Switzerland is expected to recover from over the next five years. During the same period, the unemployment rate is expected to remain at a stable, healthy level.
Since 2012, Switzerland has been reporting deflation rather than inflation rates. Ever since the financial crisis of 2008, it has struggled with deflation, which threatens to slow the economy by discouraging both investment and consumption. However, a small, open economy such as Switzerland often depends on its economic partners. An increase of the euro to Swiss franc exchange rate could place inflationary pressure on the franc.
Politically, Switzerland’s constitution determines a direct democracy. The country is divided into several cantons, i.e. administrative divisions. Switzerland is notorious for staying out of foreign relations and quarrels. It avoids starting military or political alliances and makes a point of staying neutral. As a result of local referenda, it is not in the European Union, but rather a member of the European Economic Area. It is also a member of the United Nations.