The International Monetary Fund (IMF) concluded its Article IV consultation with the Principality of Liechtenstein on March 21, 2025, after a period marked by volatility due to the pandemic and geopolitical issues. The IMF reported that Liechtenstein’s growth has resumed, albeit at a slow pace, with an estimated 0.5 percent increase in output in 2024. "The labor market remains tight with the unemployment rate well below the EU average. The Liechtenstein’s fiscal framework has continued to deliver sizable surpluses, contributing to large and growing buffers," noted the IMF. In 2025, GDP growth is expected to gain momentum. A steady increase in financial services and external demand for industrial products is anticipated, leading to a projected 1 percent growth. Inflation is expected to remain below 1 percent, with the labor market continuing to support growth through private consumption.
However, the IMF highlighted risks that could impact the economy. As an open economy, Liechtenstein could be affected by a regional or global slowdown and geoeconomic fragmentation, especially considering its use of the Swiss franc. Potential impacts include decreased exports and increased challenges from safe-haven flows to Switzerland. "Risks to the outlook are tilted to the downside," the IMF stated.
The IMF’s Executive Directors commended Liechtenstein's "prudent economic policies" and recognized its strong fiscal position and framework, which have allowed flexibility in economic responses. They also emphasized the need for continued close supervision of Liechtenstein’s financial sector to maintain stability. Identifying and prioritizing investment projects are considered crucial for strengthening medium-term budgeting. The Directors further stressed addressing labor imbalances by focusing on skill shortages, labor supply, and productivity growth. They underlined the importance of timely data for improved policymaking and encouraged closing gaps in macroeconomic statistics.
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