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UPDATE 1-Swiss exports fall in Sept but trade surplus rises

Published 10/22/2009, 04:46 AM
Updated 10/22/2009, 04:48 AM
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* Swiss real exports fall 2.3 percent m/m, down 16 pct y/y

* Trade surplus widens to 1.9 bln Sfr

* Economists see GDP boost from trade in Q3

(adds details, analysts comments, background)

By Sven Egenter

ZURICH, Oct 22 (Reuters) - Swiss exports fell in September on weak demand across all regions and sectors, highlighting the bumpy road out of recession for the Swiss economy.

But economists said trade should have boosted growth overall in the third quarter, helping to end the deep recession the Alpine country plunged into in mid-2008 when global demand collapsed in the wake of the financial crisis. Swiss exports fell 2.3 percent on the month in September when adjusted for price effects and seasonal swings, the Federal Customs Office said on Thursday.

Exports were down 16 percent in real terms when compared to last year. Imports were 10 percent lower. The nominal trade surplus widened to 1.9 billion Swiss francs in September, up from 1.7 billion francs in August.

"We hope that the economy has grown in the third quarter. The steep decline in trade we have seen in the first half is not weighing anymore," Sarasin analyst Alessandro Bee said. "Global trade is picking up and that bodes well for Switzerland."

Signs have been mounting recently that the Swiss economy is recovering already and many economists see a return to robust full-year growth in 2010 after an expected decline of Swiss gross domestic product by 1.5 to 2.0 percent in 2009.

BUMPY ROAD

The trade data highlighted, however, the long way back to previous export levels after the country recorded the largest ever drop in exports in the first half of 2009, wiping out two years of trade growth.

Almost all sectors and nearly all regions saw double-digit percentage year-on-year declines in nominal exports in September.

Swiss logistics group Panalpina also gave a reminder that a recovery would take time, saying transport volume and gross profits for the first nine months were below expectations despite a pick-up in the third quarter.

The Swiss National Bank has cautioned that the sustainability of the global recovery is still uncertain, and is sticking to its ultra-loose policy, including bond purchases, currency interventions and interest rates close to zero.

"The timing of the SNB tightening will be the big issue next year," Sarasin's Bee said.

"So far, we do not see an interest rate rise next year. But if the economy picks up in line with what the leading indicators promise they may tighten in December."

Interest futures indicate that markets are now pricing in a first 0.25 percentage point increase in the SNB's target for the 3-month Swiss franc LIBOR by June, which the central bank cut to a record low of 0.25 percent to fight the recession. (Editing by Stephen Nisbet)

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