Swiss trade balance falls into the red

Economists have welcomed news that Switzerland's merchandise trade balance has fallen into the red for the first time in eight years. They said the deficit was evidence that the Swiss economy was performing well.

This content was published on February 1, 2001 minutes

For the year 2000, Switzerland ran a trade deficit of SFr2.07 billion ($1.26 billion), its first annual deficit in eight years. It had posted a trade surplus of SFr1.03 billion in 1999.

Andreus Huffert, an economist at UBS Warburg Dillon Reed, told swissinfo that the growth in imports, which led to the deficit, was welcome news.

"Nothing has gone wrong - in fact this is good news. We have to look at these figures in relation to the current account surplus for last year.

"That surplus was around SFr50 billion - so firstly this deficit on physical goods is really peanuts and secondly it shows the Swiss economy is doing better as we have imported a lot more."

Most of Switzerland's trade with other countries is in non-physical goods, such as banking and investment services, and these figures are only seen in the current account data.

The merchandise trade data deals solely with physical goods and products that are exported from and imported to Switzerland - and that is a small proportion of Switzerland's overall trade activity.

Huffert hoped that 2001 would bring another merchandise trade deficit.

"If we see a deficit for 2001 the Swiss economy will be doing well," he said. "If we see a surplus or a even balance then we don't have very high demand for goods and we don't have enough growth in Switzerland."

Switzerland's merchandise trade deficit widened in December to SFr289.1 million ($175.5 million) from a shortfall of SFr211.4 million in November.

Huffert said the December deficit could have been caused by any number of things: "It might be because of some special factor like buying an airplane. This can cost around SFr70 million, and has a big influence on the figures."


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