View the information below regarding the economy of Liechtenstein. The summary and statistics contains
gdp, industry, agriculture and more for Liechtenstein. If you need other information please visit the
Liechtenstein Country Page.
GDP (2002): $1.8 billion, down from $2.6 billion in 1999.
Annual growth rate: N/A.
Unemployment: 1.68% (617 persons).
Avg. inflation rate (2003): 0.7% (same as in Switzerland because of the customs union).
Agriculture: Products--wheat, barley, corn, potatoes, livestock, dairy products.
Industry: Types--electronics, metal manufacturing, textiles, ceramics, pharmaceuticals, food products, precision instruments, tourism. Trade (2002): Exports--$1.8 billion, main products: small specialty machinery, dental products, stamps, hardware, pottery. Major markets--U.S., Germany, Switzerland, France, Italy, Taiwan, Japan, Austria, and U.K. Imports--$877 million: machinery, metal goods, textiles, foodstuffs, motor vehicles. Major suppliers--EU countries, Switzerland.
Economy of Liechtenstein
Since the signing of the Customs Treaty in 1924, Liechtenstein and Switzerland have represented one mutual economic area. Therefore, the borders between those states are open. The country also uses the Swiss franc as its national currency, and Swiss customs officers secure its border with Austria.
Liechtenstein is a member of EFTA, and joined the European Economic Area (EEA) in 1995 in order to benefit from the EU internal market. The liberal economy and tax system make Liechtenstein a safe, trustworthy, and success-oriented country for private and business purposes, especially with its highly modern, internationally laid-out infrastructure and nearby connections to the whole world.
The Principality of Liechtenstein has gone through economic and cultural development in the last 40 years like no other Western country. In this short period, Liechtenstein developed from a mainly agricultural state to one of the most highly industrialized countries in the world.
Besides its efficient industry, there also is as a strong services sector. Four out of ten employees work in the services sector, a relatively high proportion of whom are foreigners, including those who commute across the border from the neighboring states of Switzerland and Austria. Industrial exports doubled in 10 years from $1.4 billion (SFr. 2.2 billion) in 1990 to $2.9 billion (SFr. 4.6 billion) in 2000, but later dropped to $1.8 billion (SFr.2.8 billion) in 2002. Liechtenstein exports 12.7% of its goods to Switzerland, 42.1% to the EU, and 45.2% to the rest of the world. It imports more than 90% of its energy requirements. The industry sector contributes 40% of the country's GDP, followed by banking and finance (30%), services (25%), and agriculture (5%).
In 2002, the United States was Liechtenstein's the third most important trading partner, with $334 million (SFr. 518 million) worth of imports and SFr.44.5 million exports. Germany is the most important, with total trade worth $747 million (SFr. 1.1 billion,) and Austria second with $454 million (SFr. 705 million). Although Switzerland is an important trading partner, trade statistics are unavailable because both countries share a customs union. Some 5% of the country's revenues are invested in research and development, one of the driving forces behind Liechtenstein's successful economy. Total research and development spending in 2000 rose by 20.7% to about $149 million (233 million francs).
The Principality of Liechtenstein also is known as an important financial center, primarily because it specializes in financial services for foreign entities. The country's low tax rate, loose incorporation, and corporate governance rules and traditions of strict bank secrecy have contributed significantly to the ability of financial intermediaries in Liechtenstein to attract funds from outside the country's borders. The same factors made the country attractive and vulnerable to money launderers, although late 2000 legislation has strengthened regulatory oversight of illicit funds transfers.
Liechtenstein has chartered 17 banks, three non-bank financial companies, and 71 public investment companies, as well as insurance and reinsurance companies. Its 270 licensed fiduciary companies and 81 lawyers serve as nominees for, or manage, more than 75,000 entities (primarily corporations, institutions, or trusts), most for non-Liechtenstein residents. About one-third of these entities hold the controlling interest in other entities, chartered in countries other than Liechtenstein. The Principality's laws permit the corporations it charters to issue bearer shares. Until recently, the Principality's banking laws permitted banks to issue numbered accounts, but new regulations require strict know-your-customer practices for all accounts.