Swiss trade deficit increases

Switzerland's trade deficit with the rest of the world widened to SFr 508.2 million in January, from SFr 396.5 million the previous month.

Switzerland’s trade deficit with the rest of the world widened to SFr 508.2 million in January, from SFr 396.5 million the previous month. Imports rose 19.4 per cent to just over SFr9 billion francs, while exports increased by 7.4 per cent to around SFr8.5 billion.

The finance ministry said imports rose significanty from all trading partners, while exports were held back by a lower than expected demand from Switzerland’s main trading partner, the European Union.

In part, analysts say the widening deficit can be explained by increased consumer demand as the economic recovery gathers pace. Consumers are buying more as they become more confident about their own prospects, and that inevitably sucks in imported goods.

High energy costs are also responsible, with oil prices at a nine-year high. Oil supply limits from OPEC countries have sent fuel costs spiralling and the West is applying pressure to have more crude released onto the market.

A third factor in Switzerland’s burgeoning trade deficit was a one-off. Swissair and Crossair imported aircraft worth more than SFr 400 million in December and January and that is still being reflected in the trade figures.

By Michael Hollingdale