Current account shows surplus again in third quarter
Published: Wednesday, Dec 20th 2023, 09:50
Updated At: Wednesday, Dec 20th 2023, 09:50
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The Swiss economy once again achieved a current account surplus in the third quarter of 2023. However, at CHF 22.5 billion, the balance was CHF 4 billion below the previous year's figure, as announced by the Swiss National Bank (SNB) on Wednesday.
The year-on-year decline was mainly due to the balance of trade in services, as the SNB writes. In contrast, the balances for trade in goods, primary income and secondary income changed only slightly. As the new current account survey was introduced in the first quarter of 2023, it is possible that the data will be revised to a greater extent than usual at a later date.
Thanks to strong trade in goods, trade in goods and services resulted in a surplus of CHF 29.7 billion in favor of Switzerland in the quarter under review. Primary income (cross-border commuter income, income from foreign assets, etc.) was down CHF 3.8 billion overall, while secondary income (gifts abroad, etc.) was down CHF 3.3 billion.
Reduction in the capital account
In its communication on the current account, the SNB also provides more detailed information on developments in the financial account, which records cross-border money flows. In the third quarter, there was a net reduction on both the assets and liabilities side. The balance amounted to CHF 19 billion.
The sale of currency reserves by the SNB was the main reason for the reduction on the assets side. The reduction on the liabilities side is also linked to transactions by the SNB - it has reduced its liabilities to investors abroad in the form of SNB Bills.
Net international investment position rose by CHF 40 billion to CHF 790 billion in the third quarter compared to the previous quarter. The increase was due to the fact that the stock of liabilities (-90 billion) fell more sharply than the stock of assets (-50 billion). This was due on the one hand to transactions in the capital account and on the other hand to valuation losses due to lower stock market prices in Switzerland and abroad.
The current account records all income and expenditure of an economy, including not only trade in goods but also trade in services (tourism, etc.), labor and capital income (primary income) and current transfers (secondary income). A high surplus is considered a sign of the strength of an economy.
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