Wednesday January 09 2019
Swiss Inflation Rate Falls to 10-Month Low in December
Swiss Federal Statistical Office | Chusnul Ch Manan | chusnul@tradingeconomics.com

Switzerland's annual inflation rate eased to 0.7 percent in December 2018 from 0.9 percent in the previous month, missing market expectations of 0.8 percent. It was the lowest rate since February, as prices of housing and transportation rose at a slower pace while healthcare costs continued to fall.

Year-on-year, prices rose at softer pace for housing and energy (1.0 percentvs 1.7 percent in November), transport (1.8 percent vs 3.0 percent), restaurant and hotels (0.2 percent vs 0.5 percent), and miscellaneous goods and services (0.5 percent vs 0.9 percent). In addition, healthcare prices continued to fall (-0.7 percent, the same as in November). On the other hand, inflation picked up for food and non-alcoholic beverages (1.5 percent vs 1.3 percent) while recreation and culture prices rebounded slightly (0.1 percent vs -0.2 percent).
 
Annual core inflation, which strips out volatile price components like food, beverages, tobacco, seasonal products, energy and fuel, edged up to 0.3 percent in December from 0.2 percent in the prior month.
 
On a monthly basis, consumer prices declined 0.3 percent, the same pace as in November and compared with market consensus of a 0.1 percent drop, mainly due to falling prices for heating oil and fuel. In contrast, prices for overnight stays in hotels and new cars increased.

The average annual inflation rose to 0.9 percent in 2018 from 0.5 percent in 2017 due in particular to higher prices for petroleum products and increased housing rentals.




Tuesday January 08 2019
Swiss Jobless Rate Rises to 8-Month High
SECO | Rida | rida@tradingeconomics.com

The Swiss unemployment rate rose to a non-seasonally adjusted 2.7 percent in December 2018 from 2.5 percent in the previous month. It was the highest jobless rate since April as the number of unemployed rose markedly.

The number of unemployed people rose by 9,187 from the previous month, or 8.3 percent, to 119,661 in December. Compared to the same month a year earlier, unemployment fell by 26,993, or 18.4 percent.
Also, the number of jobseekers went up by 7,738, or 4.1 percent, to 197,950; but dropped by 14,068 year-on-year, or 6.6 percent. 
Youth unemployment rate, measuring job-seekers between 15 and 24 years old, was unchanged at 2.4 percent in December, with the number of young unemployed rising by 152, or 1.2 percent, to 13,172. Compared to December 2017, it decreased by 3,508 people, or 21.0 percent. 
When adjusted for seasonal factors, the unemployment rate stood at 2.4 percent in December, unchanged from the previous month.




Thursday December 20 2018
Switzerland Posts Largest Trade Surplus in 22 Months
Swiss Customs Administration | Chusnul Ch Manan | chusnul@tradingeconomics.com

The Swiss trade surplus widened to CHF 3.07 billion in November 2018 from a downwardly revised CHF 2.55 billion in the previous month. It was the largest trade surplus since January 2017, as exports rose 1.8 percent to an all-time high and imports fell 1.2 percent.

Exports increased 1.8 percent from a month earlier to a record CHF 19.2 billion in November, boosted by increases in sales of chemical and pharmaceutical products (3.9 percent), watchmaking (0.5 percent), precision instruments (0.7 percent), and food, beverages and tobacco (2.9 percent). By contrast, there were declines in exports of machinery and electronics (-0.9 percent), metals (-2.3 percent), and jewelry and bijouterie (-2.0 percent).  

Among major trade partners, exports rose to China (14.1 percent), the US (4.7 percent) and the UK (1.8 percent). Meantime, exports to the Euro Area fell 0.8 percent, in particular to Germany (-6.1 percent) and France (-2.3 percent). Still, there were gains in exports to Italy (1.9 percent), the Netherlands (13.4 percent), Austria (38.2 percent) and Spain (17.1 percent).
 
Imports declined 1.2 percent to CHF 16.1 billion in November, as purchases fell for machinery and electronics (-5.6 percent), metals (-3 percent), and jewelry and bijouterie (-2.9 percent) while imports of chemical and pharmaceutical products were unchanged. On the other hand, imports increased for vehicles (2.5 percent) and textiles, clothing, footwear (3.5 percent).

Among major trade partners, imports from the Euro Area went down 0.2 percent, namely from France (-0.6 percent), the Netherlands (-4.1 percent), Austria (-11.7 percent) and Spain (-3.3 percent), while those from Germany and Italy rose 0.5 percent and 2.9 percent respectively. Also, imports dropped from China (-9.6 percent) and the UK (-6.3 percent) but increased from the US (8.7 percent).
 
Considering January to November, the trade surplus narrowed to CHF 17.51 billion from CHF 21.38 billion in the same period of 2017.






Thursday December 13 2018
Switzerland Holds Policy Rate at -0.75%
SNB | Joana Ferreira | joana.ferreira@tradingeconomics.com

The Swiss National Bank held its benchmark interest rate at -0.75 percent on December 13th, as widely expected, saying the franc is still highly valued and the situation on the foreign exchange market continues to be fragile while GDP growth is likely to weaken somewhat in 2019 amid global political uncertainties and protectionist tendencies.

Excerpt from the Swiss National Bank statement:

The Swiss National Bank (SNB) is maintaining its expansionary monetary policy, thereby stabilising price developments and supporting economic activity. Interest on sight deposits at the SNB remains at –0.75% and the target range for the three-month Libor is unchanged at between –1.25% and –0.25%. The SNB will remain active in the foreign exchange market as necessary, while taking the overall currency situation into consideration.

Since the monetary policy assessment of September 2018, the Swiss franc has depreciated slightly on a trade-weighted basis. This development is primarily due to the strengthening of the US dollar. The franc is virtually unchanged against the euro. Overall, the Swiss franc is still highly valued, and the situation on the foreign exchange market continues to be fragile. The negative interest rate and the SNB’s willingness to intervene in the foreign exchange market as necessary remain essential. These measures keep the attractiveness of Swiss franc investments low and reduce upward pressure on the currency.

The new conditional inflation forecast for the coming quarters is lower than it was in September. This is mainly due to the drop in oil prices. The medium-term inflation forecast is also slightly lower owing to more moderate growth prospects. For the current year, the SNB continues to anticipate inflation of 0.9%. The forecast for 2019 has been revised down from 0.8% to 0.5%. For 2020, the SNB expects inflation of 1.0%, compared with its previous forecast of 1.2%. The conditional inflation forecast is based on the assumption that the three-month Libor remains at –0.75% over the entire forecast horizon.

In Switzerland, GDP fell by an annualised rate of 0.9%. Despite this decline, GDP was still 2.4% higher year-on-year thanks to the strong expansion in the previous quarters. A slowdown in GDP momentum was to be expected after several very strong quarters. Furthermore, the decline in GDP is also attributable to temporary factors. An analysis of all the available economic indicators points to momentum weakening slightly but remaining positive. The favourable development on the labour market also continued. Employment increased strongly in the third quarter. The unemployment rate declined again through to November to stand at 2.4%.

The SNB now anticipates slightly lower GDP growth of around 2.5% for 2018 as a whole. As in other countries, economic momentum in Switzerland is likely to weaken somewhat in 2019. The SNB expects a rise of around 1.5% in GDP for the coming year.

Risks are to the downside, as is the case with the global economy. In particular, a sharp slowdown internationally would quickly spread to Switzerland.




Monday December 10 2018
Swiss Jobless Rate Rises to 2.5%
SECO | Rida | rida@tradingeconomics.com

The Swiss unemployment rate inched higher to a non-seasonally adjusted 2.5 percent in November 2018 from a 10-year low of 2.4 percent in the previous month.

The number of unemployed people increased by 3,159 from the previous month, or 2.9 percent, to 110,474 in November. Compared to the same month a year earlier, unemployment fell by 26,843, or 19.5 percent.

Also, the number of jobseekers went up by 6,766, or 3.7 percent, to 190,212; but dropped by 13,929 year-on-year, or 6.8 percent. 

Youth unemployment rate, measuring job-seekers between 15 and 24 years old, was unchanged at 2.4 percent in November, as the number of young unemployed fell by 44, or 0.3 percent to 13,020. Compared to November 2017, it decreased by 3,550 people, or 21.4 percent. 

When adjusted for seasonal factors, the unemployment rate eased to 2.4 percent in November from 2.5 percent in the previous month, and in line with market consensus.


Tuesday December 04 2018
Swiss Annual Inflation Rate at 7-Month Low in November
Swiss Federal Statistical Office | Stefanie Moya | stefanie.moya@tradingeconomics.com

The annual inflation rate in Switzerland fell to 0.9 percent in November of 2018 from 1.1 percent in the previous month and below market expectations of 1.0 percent. It was the lowest inflation rate since April, mainly due to a slowdown in prices of food and non-alcoholic beverages and transport.

Year-on-year, prices eased for food and non-alcoholic beverages (1.3 percent compared to 1.7 percent in October); transport (3.0 percent compared to 3.4 percent); restaurant and hotels (0.5 pecent compared to 0.7 percent); and alcoholic beverages and tobacco (0.3 percent compared to 1.7 percent). Also, cost of recreation and culture dropped (-0.2 percent compared to 1.6 percent) and prices of clothing and footwear fell further (-0.8 percent compared to -0.4 percent).

Meanwhile, prices advanced at a faster pace for housing and electricity (1.7 percent compared to 1.6 percent); miscellaneous goods and services (0.9 percent compared to 0.1 percent); household equipment and maintenance (0.5 percent compared to 0.4 percent) and communication (1.7 percent compared to 0.4 percent). Additonally, inflation was steady for education (0.6 percent, the same as in October) and cost of health continued to decline (-0.7 percent, the same as in October).

Annual core inflation, which strips out volatile price components like food, beverages, tobacco, seasonal products, energy and fuel, rose 0.2 percent, following a 0.4 percent increase in the prior month.

On a monthly basis, consumer prices went down 0.3 percent, after rising 0.2 percent in October and compared with market consensus of a 0.1 percent fall. Cost of international package holidays and ovbernight stays in hotels decreased while prices of diesel and bedroom furniture advanced.


Thursday November 29 2018
Swiss Economy Contracts for 1st Time in Nearly 2 Years
SECO | Rida | rida@tradingeconomics.com

The Swiss economy unexpectedly shrank 0.2 percent on quarter in the three months to September 2018, after a 0.7 percent growth in the previous period and missing market expectations of a 0.4 percent expansion. It was the first quarterly contraction since the fourth quarter of 2016, as net trade contributed negatively to the GDP and investment in equipment slumped while household consumption was almost unchanged.

On the expenditure side, exports of goods tumbled 4.2 percent in the third quarter (vs -0.3 percent in Q2) and imports declined at a softer 2.4 percent (vs -1.1 percent in Q2). In addition, exports of services dropped 0.6 percent (vs -0.1 percent in Q2), while imports were unchanged (vs -0.1 percent in Q2).

At the same time, private households barely increased their consumption expenditures (0.1 percent vs 0.2 percent in Q2), showing little willingness to make major purchases in light of weak real wage development. General government consumption decreased slightly (-0.1 percent vs 0.2 percent), while investment in construction showed no growth (vs 0.6 percent in Q2). In addition, investment in equipment and software fell sharply in almost all categories (-2.0 percent vs 0.5 percent). Only investment in machineries was slightly higher than in the previous quarter.

On the production side, both industrial and service sectors contributed to the negative quarterly result. Value added in manufacturing declined 0.6 percent after growing significantly over the past quarters. In the energy sector too, value added decreased 2.2 percent after two extremely positive previous quarters, with the dry summer resulting in production downtime at hydropower plants. Within services, value added in trade declined 1 percent following an already negative previous quarter, driven down by both retail and wholesale. The financial sector also recorded a minor drop, with the steady expansion lasting for several quarters being interrupted. In contrast, the positive development of the previous quarters persisted in the business services (0.7 percent) and health sectors (0.5 percent). The sluggish growth in services reflects, on the one hand, the generally subdued foreign demand for Swiss services. On the other hand, the weak domestic economy in the course of the subdued consumption climate in Switzerland also affected the third quarter performance..

Year-on-year, the GDP grew by 2.4 percent in the third quarter, following an upwardly revised 3.5 percent expansion in the previous period and missing forecasts of a 2.9 percent advance. It was the weakest annual growth rate since the third quarter of 2017.





Tuesday November 20 2018
Swiss October Trade Surplus Largest in 21 Months
Swiss Customs Administration | Chusnul Ch Manan | chusnul@tradingeconomics.com

The Swiss trade surplus widened to CHF 2.64 billion in October 2018 from a downwardly revised CHF 1.27 billion in the previous month. It was the largest trade surplus since January 2017, as exports rose 6 percent to an all-time high while imports fell 1.8 percent.

Exports increased 6 percent from a month earlier to a record CHF 18.86 billion in October, boosted by increases in sales of chemical and pharmaceutical products (11.5 percent), machinery and electronics (0.3 percent), watchmaking (4.2 percent), precision instruments (0.4 percent) and metals (0.4 percent). By contrast, exports of jewelry and bijouterie dropped 9.6 percent.

Among major trade partners, exports to the Euro Area rose 9.9 percent, mainly to Germany (3.8 percent), France (6.1 percent), the Netherlands (40.4 percent) and Spain (6.1 percent) while those to Italy declined 1.1 percent. In addition, sales increased to China (7 percent), Japan (1.8 percent) and the US (0.7 percent). By contrast, exports dropped to the UK (-9.7 percent) and Poland (-7.4 percent).

Imports declined 1.8 percent to CHF 16.22 billion in October, as purchases fell for chemical and pharmaceutical products (-10.6 percent), machinery and electronics (-1.2 percent) and vehicles (-1.7 percent). Meanwhile, imports increased for metals (3 percent), jewelry and bijouterie (7.9 percent), and textiles, clothing, footwear (3.5 percent).

Among major trade partners, imports from the Euro Area went down 1 percent, namely from Germany (-0.7 percent), Italy (-3.9 percent) and the Netherlands (-8 percent), while those from France and Spain rose 18.4 percent and 8.5 percent, respectively. Also, imports dropped from the US (-4.4 percent), but increased from China (11.7 percent), Japan (38.6 percent) and the UK (0.3 percent).
 
Considering January to October, the trade surplus narrowed sharply to CHF 14.39 billion from CHF 20.16 billion in the same period of 2017.


Thursday November 08 2018
Swiss Jobless Rate Holds Steady at 10-Year Low
Seco l Rida | rida@tradingeconomics.com

The Swiss unemployment rate came in at a non-seasonally adjusted 2.4 percent in October 2018, unchanged from the previous five months and the lowest since September 2008.

The number of unemployed people increased by 729 from the previous month, or 0.7 percent, to 107,315 in October. Compared to the same month a year earlier, unemployment fell by 27,485, or 20.4 percent.
Also, the number of jobseekers went up  4,947, or 2.8 percent, to 183,446, but dropped 14,579 year-on-year, or 7.4 percent. 
Youth unemployment rate, measuring job-seekers between 15 and 24 years old, edged down to 2.4 percent in October from 2.5 percent in September, as the number of young unemployed fell 660, or 4.8 percent to 13,064. Compared to October 2017, it decreased by 3,841 people, or 22.7 percent. 
When adjusted for seasonal factors, the unemployment rate stood at 2.5 percent in October, the same as in September. 


Thursday November 01 2018
Swiss Annual Inflation Rate Rises to 1.1% in October
Swiss Federal Statistical Office | Stefanie Moya | stefanie.moya@tradingeconomics.com

The annual inflation rate in Switzerland rose to 1.1 percent in October of 2018 from 1.0 percent in the previous month and in line with market expectations. Prices increased faster mainly due to cost of food and non-alcoholic beverages and housing and energy.

Year-on-year, prices advanced further for food and non-alcoholic beverages (1.7 percent compared to 1.5 percent in September); housing and electricity (1.6 percent compared to 1.3 percent); transport (3.4 percent compared to 3.1 percent); recreation and culture (1.6 percent compared to 1.4 percent) and alcoholic beverages and tobacco (1.7 percent compared to 0.7 percent). Also, cost of household equipment and maintenance rebounded (0.4 percent compared to -0.1 percent). 

On the other hand, prices eased for restaurant and hotels (0.7 percent compared to 0.8 percent); miscellaneous goods and services (0.1 percent compared to 0.3 percent) and communication (0.4 percent compared to 0.7 percent). Additonally, cost dropped for clothing and footwear (-0.4 percent compared to 0.1 percent) while inflation was steady for education (0.6 percent, the same as in September) and cost of health continued to decrease (-0.7 percent, the same as in September).

Annual core inflation, which strips out volatile price components like food, beverages, tobacco, seasonal products, energy and fuel, was unchanged at 0.4 percent in October, the same as in the prior month.

On a monthly basis, consumer prices increased 0.2 percent, after rising 0.1 percent in September. Cost of heating ouil and new cars went up faster while international package holidays and overnight stays in hotels declined.