Capital costs and interest
Switzerland is one of the most economically and politically stable countries in the world and is known as a “safe haven.” The country is in a healthy financial situation. This applies to the finances of the central state – at the federal level – as well as the cantons and municipalities. The budget deficit of 1% of GDP is significantly below the average of EU and OECD member countries. Total public sector debt (federal, cantonal and municipal) amounts to 44% of GDP.
By comparison with the OECD, from a government debt perspective only, Switzerland's debt ratio is in the middle range. Some European countries and the US have higher ratios, while only Norway, Luxembourg and Ireland have much lower levels. Consequently, Switzerland remains one of the least indebted countries in Europe.
High credit quality, together with the high savings rate and large inflows of foreign money, lead to low interest rates - meaning that financing conditions for business and investment are comparatively favourable. In recent years, the average spread in the money-market and capital-market interest rates in Swiss francs and euros has ranged between 1.5% and 2%. Interest rates and terms may vary widely depending on the creditworthiness of the client.
Capital costs, 2009
1 = hinders economic growth, 10 = promotes economic growth
Source: 2009 IMD World Competitiveness Yearbook
