(adds details, analysts' comments, franc, background)
By Sven Egenter
ZURICH, Feb 3 (Reuters) - Switzerland's exports plunged 13 percent in December, as demand from key markets such as Germany slumped, underpinning views the export-dependent country was facing its worst recession in decades.
Exports dropped 13 percent on the year when adjusted for price swings and working days as demand was fading fast across regions and sectors, the Federal Customs Office said on Tuesday.
"December was the "mensis horribilis" for trade," the office said in a statement. "December was clearly the weakest month not only in 2008, but for many years."
The country's trade balance surplus narrowed sharply to 217 million Swiss francs from 2.25 billion francs in November.
Exports were also 13 percent lower compared to November when adjusted for seasonal swings, the data showed.
"It's obvious: we have seen that the plug has been pulled from the global economy and Switzerland follows with a lag," said ZKB analyst David Marmet. "Exports have ground to a halt."
The Swiss National Bank sees the economy contracting by between 0.5 and 1.0 percent 2009 and has slashed interest rates to close to zero to mitigate the impact of the global slump.
FRANC WOES
The data showed that the decline in demand was broad-based. Exports to Germany, Switzerland's most important market, dropped 8 percent on the year in December. Demand from emerging markets -- long a major support for Swiss exporters -- fell 13 percent.
Exports fell 21 percent on the year in real terms in the textile industry, 18 percent in the metal industry and 7 percent in the machinery and electronics sector. Watch exports were down 11 percent.
The strength of the Swiss franc, which has risen some 10 percent against the euro in the course of 2008 and hit a record high in October, has been adding an extra burden for exporters.
Bucher
"The Swiss franc is weighing on exports," said Credit Suisse analyst Fabian Heller. "But we have two simultaneous effects. The main story is the decline in demand."
The franc traded near flat on the day on Tuesday at 1.49 per
euro.
Despite the woes of Swiss exporters, the central bank looks unlikely to tackle the franc's appreciation soon.
"Demand is collapsing, so the franc strength plays a smaller role," ZKB's Marmet said. "The SNB will not react immediately. They will not intervene. A beggar-thy-neighbour policy would not be opportune at the moment."
The central bank has said it might turn to less conventional means to boost the economy such as interventions to weaken the franc. But SNB Chairman Jean-Pierre Roth said last week he was currently comfortable with the franc. (editing by Chris Pizzey)