With a population of around 37 800 inhabitants, Liechtenstein is one of the smallest countries in Europe and the world. A third of the population are foreign nationals, mainly from Switzerland, Austria and Germany.
A unique division of powers
Liechtenstein is „a constitutional, hereditary monarchy on a democratic and parliamentary basis“ (Article 2 of the Constitution of the Principality of Liechtenstein). Liechtenstein has become a remarkable success story with outstanding degrees of political stability, economic prosperity and social cohesion.
An open, diversified and successful economy
Liechtenstein has an extremely diverse national economy with a large number of small and medium-sized enterprises. The high value-added generated can mainly be attributed to a strong industrial sector and to financial service providers. At the same time, the contribution of the public sector to the national economy is comparatively small.
Liechtenstein’s economy is still heavily shaped by its manufacturing. In 2015, the goods-producing sector provided 37% of total employment. This represents a remarkably high proportion, compared to other European countries.
Around three-fifths of all persons employed work in the services sector. In this sector, the most important branches of the economy include financial and insurance services, legal and tax consultancy as well as trade.
Due to Liechtenstein’s limited domestic market, especially larger enterprises are heavily export-oriented. A vast majority of their goods production is sold abroad. The most important export destinations for Liechtenstein’s goods-producing industry are Switzerland, Germany and the USA.
In 1924, Liechtenstein declared the Swiss franc (CHF) the legal currency of Liechtenstein. In 1991, Liechtenstein joined EFTA, in 1995 it joined the EEA (European Economic Area) giving it access to the European Single Market.
A distinctive feature of Liechtenstein’s national economy is the large number of inward cross-border commuters. In 2016, 54% of Liechtenstein’s work force consisted of this group. Since GDP is generated by the entire work force, country comparisons of GDP per capita may in the case of Liechtenstein lead to misleading conclusions. Hence, GDP per person employed may be considered a more appropriate figure to compare Liechtenstein across countries.
With only 406 unemployed in Liechtenstein, the unemployment rate is as low as 2.1%
Liechtenstein provides 37.453 jobs (which is about the same number as the resident population)
The median gross monthly wage is CHF 6.552 (2014)
Small state, sound budget
Liechtenstein’s public finances also stand out in international comparisons (see latest Finanzstatistik here):
National and municipal budgets run an overall surplus.
Liechtenstein is virtually free of public debt (with a debt/GDP ratio of 0.5%).
Public expenditures are only 20.9% of national GDP.