Liechtenstein Economic Research Center presents growth analysis for 2008.
Liechtenstein’s economy is currently in good condition. The Liechtenstein Economic Research Center (KOFL) again recorded strong growth for 2007. The outlook for 2008 is somewhat more muted. KOFL forecasts a slowdown of productivity growth.
The KOFL economic forecast for 2007 indicates continued strong expansion of macroeconomic production. The growth rate of the real gross domestic product (GDP) is estimated to be about 5% relative to the previous year. Based on assessments of the global economy and its impact on Liechtenstein, KOFL expects a slowdown of economic dynamics in Liechtenstein for 2008. The strong expansion of real macroeconomic production expected for 2007 will, according to the forecast, continue "to a significantly lesser degree". KOFL expects that the growth of real GDP relative to 2007 will hardly exceed the 2% mark. According to this estimate, real GDP will increase to CHF 5.186 billion.
One of the most important engines of Liechtenstein’s economic dynamics is its export industry. Thanks to international economic trends, export trade grew exceptionally strongly in the past year. Nominal direct exports, not including exports to Switzerland, reached CHF 4.182 billion in 2007. The growth rate of nominal direct exports, which amounted to CHF 3.604 billion in 2006, is therefore 16.1%, while the growth rate in the previous year had already been 11.6%. Imports also increased strongly in 2007 relative to the previous year. Nominal direct imports in the past year reached CHF 2.416 billion, 11.7% higher than the previous year.
Total employment in Liechtenstein grew by 4.5% to 32,472 full-time and part-time workers in 2007. KOFL expects that the increase in employment will continue in 2008, but the growth rate of 2.5% will be significantly lower. Employment trends in 2007 were positive. At the end of 2007, 472 people were unemployed, a decrease of 123 since the beginning of the year. The unemployment rate thus sank to 2.7% by the end of 2007.
According to the KOFL study, the macroeconomic employment trend in Liechtenstein has been strong for the past 25 years. The number of workers more than doubled from 15,323 in 1982 to 31,074 by the end of 2006. In this observation period, Liechtenstein’s economy – like that of other Western European countries – has gravitated toward the tertiary sector. The share of workers in the manufacturing sector decreased relative to other sectors, but the number of manufacturing jobs still increased substantially. It can therefore not be said that Liechtenstein is undergoing deindustrialization, as the employment figures confirm: The number of manufacturing jobs grew from 8,448 in 1982 to 13,569 by the end of 2006. The growth in manufacturing jobs during this period was therefore 61%. In the service sector, jobs increased from 6,500 to 17,101 over the same period, an increase of 163%. KOFL concludes that the decrease in the share of workers in the manufacturing sector is therefore due to the greater employment dynamics overall in the service sector.
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