After a record high in 2008, Swiss foreign trade suffered its sharpest decline in decades last year due to the global economic crisis.

Exports and imports both fell by SFr26 billion ($24.51 billion), dropping back to 2006 levels. The Swiss watch industry had a particularly bad year with a 22 per cent fall in exports in 2009 compared with the previous year.

Overall exports slumped by 12.6 per cent to SFr180.3 billion in 2009, the sharpest decline since 1944, the finance ministry said in a statement on Thursday.

Imports also fell sharply, down by 14.3 per cent to SFr160.1 billion. This represents the biggest drop since 1975 – pushing imports back to 2006 levels. The decline began in the last quarter of 2008 and continued to steepen, reaching its worst point in mid-2009.

Trade with the European Union declined markedly in both directions, while the Swiss trade surplus reached a new peak of SFr20.2 billion.

Switzerland's watch industry, which accounts for around seven per cent of Swiss exports, has faced its most severe slump in demand in decades as consumers have scaled back on spending.

Watch exports of SFr13.2 billion represented a 22 per cent drop on 2008, according to the statistics published by the Federation of the Swiss Watch Industry.

China and Hong Kong were the silver lining in the industry’s dark cloud. In the fourth quarter, exports to China rose 43.5 per cent and were up 27 per cent to Hong Kong - the industry's biggest market.

Combined, Hong Kong and China account for about a quarter of the Swiss watch industry’s market.

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