A record trade surplus of $9.55 Billion was registered in Switzerland in H1 2008 owing to rising demand for Swiss products in emerging markets and well-performing export industry.
The Federal Customs Office revealed that trade surplus in Switzerland rose to record of $9.55 Billion during the period spanning from January to June 2008, as reported by swissinfo.ch.
According to the Federal Customs Office, in the first half of 2008, exports reached $101.64 Billion, a rise of 7.5%, whereas the imports grew 4.7% to $91.96 Billion, leading to a 44.8% gain in surplus over H1 2007. The cost of exported products too rose by 9.2%, while clothing and textile exports declined by nearly 2.9% and 2.3% respectively. Tobacco, drinks and foodstuffs recorded the highest growth at 17.6%, followed by 14.9% rise in the exports from watch industry. Also, electronics, chemicals and precision instruments grew by nearly 7%.
Surging demand from various developing markets such as China and Brazil is the main reason for rise in Switzerland’s trade surplus. The increasing demand for luxury and high quality Swiss goods like watches in the oil-exporting countries and emerging economies is fuelling trade surplus in the country.
Moreover, growth in the export industry is another important reason for the increase in trade surplus of Switzerland. Despite a slowdown in the total exports during June 2008, it recorded an impressive growth over imports, raising trade surplus in the country. Also, the reduction in export subsidies by the Swiss government is leading to an increase in exports.
However, the trade surplus is expected to decline in coming future as poor economic conditions in the US and Canada will lead to a fall in overall export growth in terms of volume.
According to a Research Analyst at RNCOS, “Favorable business conditions in Switzerland are leading to a rise in trade surplus, which, in turn, is positively affecting the country’s economy as it brings a huge amount of foreign exchange. However, a decline can be witnessed in coming quarters as the demand is falling. Thus, exporters should focus more on emerging markets in place of industrialized countries as demand in these markets is higher than the developed countries.”
