According to data released on Tuesday, last year Switzerland revealed its greatest trade surplus ever. This piled on additional pressure on the Swiss National Bank to stand behind its policies to deteriorate the Swiss franc which is strengthening.
As stated by the Swiss customs office, increasing pharmaceutical exports improved the merchandise trade surplus by almost one-fifth to reach 37.3 billion Swiss francs.
Exports saw a rise to 242.4 billion francs, which is almost 3.9%, thanks to the chemical and pharmaceuticals sectors where Roche and Novartis revealed an increased sales outlook the previous year.
The enlarging trade surplus might make things harder for the Swiss National Bank following the appearance of the country on the watch list of the United States Treasury which includes countries which could be possible currency manipulators.
The Treasury quoted the country’s huge bilateral goods trade surplus with the U.S. together with its general current account surplus.
In 2019, Switzerland saw a 27.65 billion franc surplus. This was an increase from 2018’s 25.38 billion, as well as 2017’s 21.08 billion. Since 2011, the U.S. market’s exports have nearly doubled. Even though last year’s data is yet to be released, Switzerland usually runs a shortage when it comes to bilateral services trade.
Through the Swiss National Bank’s foreign currency purchases, it hopes to avert deflation and cease the pricing out of Switzerland’s goods from foreign markets by the appreciation of the franc.
The Swiss National Bank stresses that is interventions as well as declining interest rates are not for the purpose of aiming benefits for the nation’s exporters by devaluing the franc. When asked to comment on Tuesday, the SNB declined.
Charlotte de Montpellier, ING economist, while observing the increase of 9.1% in goods exported to the U.S. last year, stated that these statistics are risky for the country, provided that Switzerland has been mentioned on the monitoring list generated by the United States.