Switzerland is known all over the world for its watches, chocolate and cheese. However, not everyone knows that gold is the main export product in the country.
What role does the precious metal play in the economy of the Alpine state?
Import and export leader
In the 1970s, due to the advantages of its financial system, Switzerland became an important centre of international gold trade. About 70% of the gold produced in the world is imported to this country, where it is processed at the world's largest refineries*.
The purified metal is cast into gold bars of the highest standard. 90% of the gold bars that meet the authoritative quality standard Good Delivery are produced by the Swiss enterprises. Such bars are most often used in the state gold and foreign currency reserves.
Map info: Switzerland is the world leader in terms of gold import. Every year the country receives the yellow metal in the amount worth more than 70 billion dollars.
A significant part of the gold processed in Switzerland is sent abroad. The export of the precious metal makes about a quarter of the total exports in the country, exceeding all other types of goods. Therefore, the gold industry is of strategic importance for Switzerland.
An illustrative example: in 2017, the country exported $70 billion worth of gold. The export of the famous Swiss watches for the same period reached a total of only 20 billion.
Important state resource
Switzerland ranks seventh in the world in terms of gold reserves, with 1040 tons of the precious metal. At the same time, Switzerland is a small country in terms of population (8,42 million people). If one counts the gold reserve of Switzerland per capita, it will rank first: 123,5 grams of gold per each inhabitant. This is more than in the US and Russia combined.
A survey conducted by the University of St. Gallen showed: gold is very popular in Switzerland as a saving tool. 60,5% of respondents consider gold a reasonable purchase, and one in five is going to buy the precious metal within the next year.
The Swiss purchase gold to protect themselves against financial and geopolitical risks. The survey participants described the yellow metal as a profitable long-term investment, noting its efficiency in increasing the savings amount and ensuring Financial Security.
Chart info: in 2018, Switzerland ranked second in the world in demand for gold per capita.
On July 15, 2019 the price of gold is $1,416 per ounce.
Chart info: over the past year, the price of gold in Swiss francs has increased by 11%.
Source of prosperity
Switzerland is one of the most stable and prosperous countries on the planet. Average population incomes are remarkably higher than in the rest of the world. According to the International competitiveness centre IMD, Switzerland ranks fourth in the rating of the most competitive economies.
Gold makes a significant contribution to the welfare of the Alpine country. The yellow metal occupies an important place in the industrial sector of the state and serves as the main object of international trade. Rising prices and increasing global demand for gold have a beneficial effect on the Swiss economy.
Having made gold the key element of their economic system, the Swiss have not miscalculated and can look into the future with confidence.
*Refinery — an enterprise where impurities are removed from precious metals.