Swiss Current Account Surplus Posts Robust Growth For Full Year 2006

Sep 12, 2007 - Swiss current account surplus grew to CHF73.6 billion in 2006, compared to the surplus of CHF62.8 billion in 2005, the Swiss National Bank, SNB, said Wednesday. The current account surplus amounted to 16% of GDP in 2006, up from 14% in the previous year.

The expansion of the current account surplus was underpinned by the 13% nominal surge in exports of goods and services. Favorable overseas market conditions helped the exports of most industries, the SNB said. Service exports were bolstered by high growth rates at banks and insurance companies, increased merchanting income. Receipts from tourism posted a 6% gain to CHF13 billion.

Imports of goods increased 11% in nominal terms, while imports of services rose due to expenses of the tourism sector. The surplus from trade in goods rose to CHF5.1 billion in 2006 from CHF3 billion in the previous year, while the surplus from trade in services advanced to CHF33.2 billion from a surplus of CHF28.3 billion in the earlier year.

Labor income of persons employed by international organizations in Switzerland grew 2%. Portfolio income from Swiss investments abroad swelled to CHF31 billion. Income from equity securities grew CHF2 billion to CHF13 billion in 2006, while income from debt securities also increased CHF2 billion to CHF 18 billion. On the other hand, foreign investors investment income on their holdings in Switzerland climbed by a fifth to CHF17 billion in 2006. Net income gained CHF1 billion to CHF 14 billion in 2006.

Current transfers from abroad advanced CHF2 billion to CHF 17 billion, while current transfers abroad remained stable at CHF30 billion. Private transfers registered a growth of CHF2 billion to CHF13 billion.

The financial account posted a net outflow of CHF91 billion in 2006, compared to the outflow of CHF84 billion in 2005. Net capital outflow was CHF54 billion in 2006, while portfolio investment came in at a net outflow of CHF 54 billion too, compared to the net outflow of CHF66 billion in the last year. Other investment showed a net capital inflow of CHF18 billion.

Direct investments abroad climbed to CHF73 billion in 2006 almost equaling the high of year 2000, the SNB said. This compares with the CHF63 billion worth of direct investments made in the previous year. The main investment destinations were the US, which took CHF22 billion, while Singapore attracted CHF5 billion in investments and countries in Central and South America took CHF14 billion in investments.

Foreign direct investment in Switzerland amounted to CHF19 billion. Derivatives and structured products were reported in the balance of payments for the first time. Domestic investors purchased CHF7 billion worth of structured products issued by foreign issuers, while foreigners invested CHF4 billion in structured Swiss assets.

The reserve assets of the SNB slumped to a negative CHF0.4 billion at the end of 2006, from a positive balance of CHF22.7 billion at the end of 2005.