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Swiss trade surplus highest since at least 1987
[ZURICH] Switzerland's September trade surplus was the country's highest since at least 1987, data showed on Thursday, the latest sign its export-dependent economy has weathered a currency market shock that sent the Swiss franc soaring.
The Swiss National Bank's abrupt decision on Jan 15, 2015 to end a cap on the franc at 1.20 per euro upended global currency markets and sent Switzerland's currency roaring higher.
The move - made because the SNB felt its policy had become too expensive to maintain - sparked fears of a recession for the economy as products became more expensive for foreign buyers.
However, Switzerland avoided an anticipated recession last year with many companies accepting lower margins to retain customers. The government forecasts 1.5 per cent growth in 2016.
The latest trade figures from the Federal Customs Office suggest the worst could be over for Swiss exporters. Exports rose year-on-year by a real, work-day-adjusted 5.7 per cent in September to 18.8 billion Swiss francs (S$26.39 billion), an 11-month high.
This helped Switzerland to a monthly surplus of 4.37 billion francs, higher than at any time since record-keeping began in 1988.
Strong sales abroad of chemical and pharmaceutical products boosted trade. Switzerland is home to Roche and Novartis , two of the world's biggest pharmaceutical companies.
The franc now trades at around 1.0850 per euro, well stronger than pre-cap levels, and remains a headache for watch manufacturers like Swatch and Richemont.
In September, Swiss watch exports fell 5.7 per cent year on year in nominal terms to 1.71 billion francs.
The SNB has introduced negative interest rates and said it will intervene in the currency market if necessary to weaken what it calls a "significantly overvalued" franc.