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TABLE OF CONTENT
FMA Annual Report 2021
LIECHTENSTEIN NATIONAL ECONOMY PROVES RESILIENT
The Liechtenstein national economy has recovered
The world economy recovered strongly in 2021, but
pared with larger national economies, Liechtenstein’s
this was increasingly accompanied by supply bottlenecks in global trade and rising inflationary pressure.
After challenging months at the turn of the year, the second and third quarters were characterised by a
faster and more strongly from the pandemic-induced
recession than other economies internationally. Comgross domestic product (GDP) is usually characterised
by higher volatility and is thus especially vulnerable to
global economic downturns. The deep recession during the global pandemic nevertheless constituted a
strong recovery of the global economy. Already in the
striking exception. The rapid recovery of external
increasingly gloomy again. Growth in global trade
beginning in the second half of 2020 was especially
of supply and transport bottlenecks in global trade,
the small size of the national economy and the minor
sures in both the real and financial economy caused
industrial sector is by far the largest economic sector.
summer, however, the economic outlook became activity turned negative again against the backdrop
and at the same time, high and rising inflationary pres-
demand due to the strong rebound in global trade
important for Liechtenstein, not only because of
role of domestic demand, but also because the
increasing uncertainty. At the end of the year, the
As a result – and in contrast to most European
nearly 40 years, and inflation in the Eurozone also rose
its pre-crisis level already in the first quarter of 2021.
United States recorded its highest inflation rate in
to its highest level since the introduction of the single currency (Chart 3).
Nevertheless, global equity markets were trading close
economies – Liechtenstein’s GDP was able to exceed
Once again, Liechtenstein’s economy was able to
demonstrate its high resilience to global macroeco-
nomic shocks, which is also due to several crucial
to their record levels at the end of the year, against
structural features, including an extremely resilient
Low real interest rates, depressed risk premiums, and
subsequent economic slowdown was already notice-
of dramatic price corrections in the event of interest
nomic index, which is calculated by the Liechtenstein
the backdrop of strongly negative real interest rates. high valuations on the financial markets entail the risk rate or growth shocks. In light of increasing inflation
labour market. Also in Liechtenstein, however, the
able in the second half of the year. The KonSens ecoInstitute on a quarterly basis, declined significantly
fears and corresponding expectations that the US
over the course of the year.
the equity markets already fell noticeably at the begin-
The Liechtenstein financial sector remained remark-
Federal Reserve will raise interest rates several times, ning of 2022.
ably stable in the challenging global environment of
the past two years. In contrast to banks in the Euro-
The supply shock in the energy and food sectors
zone and the United States, the decline in profitability
the pressure on central banks to tighten monetary
19 pandemic was very limited. Instead, the banking
market correction has once again accelerated sig
new record level of assets under management in the
triggered by the conflict in Ukraine will further increase policy. Against this backdrop as well, the financial
nificantly since the end of February, especially in
Europe.
in the Liechtenstein banking sector during the Covid-
sector continued on its growth path and reached a
reporting year, rising to a level of CHF 424.4 billion as
of the end of 2021.
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