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Switzerland most resilient country in the world

Switzerland continues to be the most resilient country in the world, a study by Swiss Re and the London School of Economics has found. This also showed that the capacity of economies worldwide to absorb new shock is still lower than before the global financial crisis.

Ranking
Image Credit: Swiss Re

The reinsurance company Swiss Re has collaborated with the London School of Economics (LSE) to investigate the capacity of 31 countries to absorb new shock. Cumulatively, these 31 advanced and emerging economies make up about 75 percent of the world’s gross domestic product.

Switzerland again ranks top

According to the results, Switzerland is the world’s most resilient economy. It ranks top with an Economic Resilience Index of 0.84. Canada is close behind with 0.81 points, followed by the USA with 0.79 points.

According to the study, the world economy is less resilient today than it was in 2007, before the financial crisis. Around 80 percent of the countries in the sample had lower resilience scores for 2018 than in 2007. The main drivers of this trend have been the exhaustion of monetary policy options in many advanced countries and an ongoing challenging operating environment for the banking sector, even as policy efforts have strengthened financial institutions since the crisis.

Switzerland was also the most resilient country back in 2007, when its index score was 0.89.

“The highly expansive monetary policy of recent years leaves central banks with little scope for action going forward and at the same time makes them more dependent on the financial markets,” explained Jerome Jean Haegeli, Group Chief Economist at Swiss Re. “In conjunction with a lack of structural reforms, this will in all likelihood result in longer recessions in future.” Insurance companies can take steps to improve resilience, Swiss Re reports. There is a huge opportunity for them to close the record-high global protection gap of US$ 1,200 billion.

Switzerland also high in other rankings

Switzerland is regularly placed in the top spot in other rankings related to resilience. In the recently published FM Global Resilience Index 2019, it this year came in at number three. This report is published by insurance company FM Global and examines the resilience of business sectors in different countries.

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