‘Horribilis’ December for Swiss foreign trade

GENEVA – Switzerland posted a record trade surplus of CHF 19.8 billion (EUR 13.3 billion, USD 17 billion) in 2008, but both imports and exports dropped at an exceptionally sharp rate in December, official data showed Tuesday.

The annual trade surplus was 42 percent up on 2007, affected by a 4.6 percent increase in exports to CHF 206.7 billion, the federal customs office said in a statement.

It was the first time that Swiss exports exceeded the 200 billion mark in a year.

Imports grew by 1.8 percent over the full year to CHF 186.8 billion.

However, the figures were dampened by one of the sharpest monthly slowdowns seen in recent years in December, the customs office said.

Exports dropped by 10.8 percent in the final month of 2008, as Swiss textiles, metals and plastics suffered the impact of the economic slump.

"Foreign trade hadn’t received such a cold shower for years", the customs office added, dubbing December a "mensis horribilis".

The fall in imports and exports over last quarter of 2008 was the worst quarterly decline recorded since 2001.

Imports fell 11.4 percent, but the overall trade figures for December 2008 remained in surplus at CHF 217 million, an increase of about two-thirds over December 2007.

"Switzerland was hit by the global economic recession in the fourth quarter, mainly through its exports", said economist Alexis Koerber of BAK Basel Economics.

Koerber predicted that Swiss exports would continue to decline over the coming months but could rebound in the second half of 2009 with an improvement in the global economic climate.

"Other scenarios are possible, especially with a longer than expected recession", he cautioned.

Apart from clothing, the key export sectors that suffered were suppliers to the manufacturing industry abroad, including machine tools for industry, raw chemicals and plastics, the official data indicated.

But the overall export boom in 2008 helped Swiss trade diversify, as exports to transition states and developing countries including China, Thailand and Brazil grew by about 14 percent over 2007.

Swiss export growth to the European Union, Switzerland’s largest trading partner, and other industrialised countries, was in the low to middle single digits for 2008.

Imports were largely increased by oil-producing nations and emerging or transition economies in Asia and central Europe.

But the growth in imports from China slowed down sharply to 4.5 percent, instead of the double digit growth recorded every year since 2002.

Deliveries from the United States, Britain, Ireland and Finland remained the same or fell compared to 2007.

[AFP / Expatica]