Press release
Communications
P.O. Box, CH-8022 Zurich Telephone +41 58 631 00 00 communications@snb.ch
Zurich, 20 September 2019
Swiss balance of payments and international investment positionQ2 2019
Overview
In the second quarter of 2019, the current account surplus amounted to CHF 21 billion, slightly lower than in the same quarter of 2018. The goods trade balance and the primary income balance (labour and investment income) declined marginally, while the services trade balance and the secondary income balance (current transfers) hardly changed.
In the financial account, reported transactions showed a net acquisition on the assets side (CHF 11 billion) and a net incurrence on the liabilities side (CHF 5 billion). The main contributor to the net acquisition on the assets side was other investment, while in the case of the net incurrence on the liabilities side it was portfolio investment.
Two opposing effects drove developments in the international investment position. On the one hand, valuation gains resulted from price increases on domestic and foreign stock exchanges; on the other, exchange rate-related valuation losses were recorded. On the assets side, revaluations largely offset each other, and stocks rose by CHF 6 billion to CHF 4,804 billion. On the liabilities side, price-related valuation gains predominated. Stocks of liabilities were up CHF 30 billion to CHF 4,008 billion. As a result, the net international investment position receded by CHF 24 billion to CHF 796 billion.
New data available on breakdown of changes in stocks in the international investment position
The SNB has expanded its range of data on Switzerland's international investment position (IIP). In addition to publishing information on the stocks in the IIP at specific times, it now also provides data on changes to the IIP broken down according to their causes. The data are
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now available on the SNB data portal (data.snb.ch, Table selection, International economic affairs, Switzerland's foreign economic affairs, Switzerland's international investment position).
Current account
Receipts
At CHF 83 billion, receipts from total goods trade were slightly lower compared to the year- back quarter. Whereas receipts according to the foreign trade statistics (total 1) rose by CHF 1 billion to CHF 62 billion, exports of non-monetary gold fell by CHF 2 billion to CHF 12 billion. At CHF 9 billion, receipts from merchanting remained on a par with the year-back quarter.
Receipts from foreign trade in services were the same as in the year-back quarter at CHF 31 billion. A slight increase in tourism receipts was offset by a decrease in receipts from licence fees.
At CHF 40 billion, receipts under primary income (labour and investment income) were down by CHF 4 billion on the year-back quarter. This was primarily attributable to lower earnings from direct investment abroad. Receipts under secondary income (current transfers) amounted to CHF 11 billion, a CHF 1 billion increase over the year-back quarter. This was predominantly due to higher claim payments to reinsurance companies in Switzerland for loss events they had reinsured abroad.
Expenses
Expenses for total goods trade amounted to CHF 69 billion - the same as in the year-back quarter. Expenses according to the foreign trade statistics (total 1) fell by CHF 1 billion to just under CHF 52 billion, offsetting the other components.
Expenses for total services imports, at CHF 26 billion, were at the same level as in the year- back quarter. The highest growth in expenses was recorded in business services, whereas the most pronounced decrease was in telecommunications, computer and information services.
Expenses under primary income (labour and investment income) fell by CHF 4 billion to CHF 35 billion. This was mainly due to lower earnings from direct investment in Switzerland. Expenses under secondary income (current transfers) came to CHF 13 billion, around CHF 1 billion above the level of the year-back quarter, mainly as a result of higher foreign claim payments by reinsurance companies.
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Net
The current account surplus totalled CHF 21 billion, slightly lower than in the second quarter of 2018. It was calculated as the sum of all receipts (CHF 164 billion) minus the sum of all expenses (CHF 143 billion).
Financial account
Net acquisition of financial assets
The assets side of the financial account registered a total net acquisition of CHF 11 billion (Q2 2018: net reduction of CHF 30 billion). Other investment contributed CHF 7 billion to this net acquisition (Q2 2018: net reduction of CHF 36 billion), in part because the SNB increased its foreign claims in connection with repo transactions. Direct investment saw a net acquisition of CHF 3 billion (Q2 2018: net acquisition of CHF 19 billion). Resident companies reinvested earnings in their non-resident subsidiaries, although they also withdrew equity capital, albeit to a lesser extent. Reserve assets also posted a net acquisition, of CHF 3 billion (Q2 2018: net acquisition of CHF 3 billion). Portfolio investment, by contrast, showed a net reduction of CHF 2 billion (Q2 2018: net reduction of CHF 15 billion), mainly because resident investors sold equity securities of non-resident issuers.
Net incurrence of liabilities
The liabilities side of the financial account registered a total net incurrence of CHF 5 billion (Q2 2018: net reduction of CHF 31 billion), partly as a result of portfolio investment. Nonresident investors bought equities of resident issuers amounting to CHF 9 billion (Q2 2018: net reduction of CHF 2 billion). Direct investment registered a net reduction of CHF 4 billion (Q2 2018: net incurrence of CHF 3 billion). As in previous quarters, non-resident parent companies withdrew equity capital from resident subsidiaries. This reduction was offset by an inflow of funds resulting from the reinvestment of earnings and from intragroup lending. In the case of other investment, the transactions balanced each other out (Q2 2018: net reduction of CHF 32 billion). The SNB increased its amounts due to non-residents, while commercial banks reduced their amounts due to banks and customers.
Net
The financial account showed a balance of CHF 6 billion (Q2 2018: CHF 2 billion). The balance is calculated as the sum of all net acquisitions of assets minus the sum of all net incurrences of liabilities plus the balance from derivatives transactions. The financial account balance corresponds to the change in the net investment position resulting from cross-border investment.
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Statistical difference
The statistical difference item includes all deviations which arise from errors and omissions in statistical surveys. It is calculated as the financial account balance minus the sum of the current account balance and the capital account balance.
In the second quarter of 2019, the statistical difference amounted to CHF -16 billion (Q2 2018: CHF -21 billion). This negative balance suggests either that current account receipts or net incurrence of liabilities have been overestimated or, alternatively, that current account expenses or net acquisition of financial assets have been underestimated.
International investment position
Assets
Stocks of assets were up slightly, by CHF 6 billion to CHF 4,804 billion compared with the first quarter of 2019. Revaluations due to price and exchange rate changes moved in opposite directions, largely offsetting each other. On the one hand, all components recorded valuation losses on assets in foreign currency; on the other, prices on foreign stock exchanges rose, resulting in valuation gains for portfolio investment and reserve assets. Portfolio investment recorded an increase of CHF 8 billion to CHF 1,379 billion and reserve assets rose by CHF 6 billion to CHF 811 billion. Stocks of derivatives were up CHF 3 billion to CHF 92 billion. Other investment stocks, by contrast, were unchanged at CHF 838 billion - exchange rate losses were offset by financial account transactions. Direct investment stocks declined by CHF 10 billion to CHF 1,683 billion.
Liabilities
Owing to revaluations, stocks of liabilities rose by CHF 30 billion overall to CHF 4,008 billion. Valuation gains driven by increases on the Swiss stock exchange significantly outweighed foreign exchange losses, as only a small proportion of liabilities is held in foreign currency. Portfolio investment accounted for all the valuation gains; stocks grew by CHF 34 billion to CHF 1,220 billion. Transactions also contributed to this increase, as non-resident investors purchased equities of resident issuers. However, statistical changes partly offset the rise; in previous quarters, the stocks reported by reporting institutions were too high, and this was corrected in the quarter under review.Direct investment stocks grew by CHF 1 billion to CHF 1,513 billion. Here, statistical changes offset the foreign exchange losses and transaction-related reduction. Stocks of other investment receded by CHF 4 billion to
CHF 1,182 billion, and stocks of derivatives by CHF 1 billion to CHF 92 billion.
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Net international investment position
Given that stocks of liabilities (up CHF 30 billion) showed a more pronounced increase than stocks of assets (up CHF 6 billion), the net international investment position fell by CHF 24 billion to CHF 796 billion.
Remarks
The balance of payments (current account, capital account and financial account) records transactions between residents and non-residents during a specified period. The international investment position reports the cross-border stocks of financial assets of all institutional units on a specific reference date at the end of a period. Changes in assets and liabilities in the international investment position are the result, first, of transactions recorded in the financial account. Second, stocks are affected by revaluations (due to changes in prices or exchange rates) and other changes in volume (e.g. reclassifications or other statistical changes).
In the comments on the balance of payments, period-by-period comparisons of transactions refer to the year-back quarter, since certain items are influenced by seasonal factors (e.g. tourism), especially in the current account. Seasonally adjusted data are not available. By contrast, the period-by-period comparisons in the international investment position refer to stocks at the end of the previous quarter. The focus in this case is on changes in stocks over the course of the period under review.
Comprehensive tables covering the balance of payments and the international investment position can be found on the SNB's data portal, data.snb.ch, Table selection, International economic affairs.
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SWISS BALANCE OF PAYMENTS - OVERVIEW
In CHF millions
2018 Q2 | 2018 Q3 | 2018 Q4 | 2019 Q1 | 2019 Q2 | |
Current account, net | 21,721 | 16,827 | 15,449 | 20,553 | 21,273 |
Receipts | 167,760 | 158,548 | 159,145 | 149,890 | 163,872 |
Expenses | 146,039 | 141,720 | 143,695 | 129,337 | 142,599 |
Goods and services, net | 19,142 | 17,215 | 19,774 | 23,119 | 18,959 |
Receipts | 113,976 | 110,868 | 112,803 | 110,066 | 113,339 |
Expenses | 94,834 | 93,653 | 93,029 | 86,947 | 94,380 |
Goods, net | 14,460 | 11,187 | 16,410 | 16,496 | 14,239 |
Receipts | 83,455 | 79,296 | 82,121 | 79,644 | 82,853 |
Foreign trade | 78,332 | 74,156 | 75,159 | 73,629 | 77,471 |
Of which foreign trade total 11 | 59,958 | 54,853 | 60,819 | 60,671 | 61,456 |
Of which non-monetary gold | 14,030 | 15,055 | 10,103 | 8,972 | 12,140 |
Supplements to foreign trade2 | -3,486 | -3,019 | -2,858 | -3,488 | -3,495 |
Merchanting | 8,609 | 8,159 | 9,820 | 9,503 | 8,877 |
Expenses | 68,995 | 68,109 | 65,711 | 63,148 | 68,614 |
Foreign trade | 70,436 | 69,049 | 66,558 | 64,564 | 70,016 |
Of which foreign trade total 11 | 52,399 | 48,107 | 50,586 | 51,634 | 51,658 |
Of which non-monetary gold | 15,399 | 19,071 | 13,188 | 10,334 | 15,467 |
Supplements to foreign trade2 | -1,440 | -940 | -847 | -1,416 | -1,402 |
Services, net | 4,682 | 6,028 | 3,364 | 6,624 | 4,721 |
Receipts | 30,521 | 31,572 | 30,682 | 30,422 | 30,486 |
Expenses | 25,839 | 25,544 | 27,318 | 23,799 | 25,765 |
Primary income, net | 4,865 | 1,956 | -1,531 | 340 | 4,625 |
Receipts | 43,494 | 36,435 | 34,823 | 28,928 | 39,591 |
Expenses | 38,629 | 34,479 | 36,354 | 28,588 | 34,966 |
Labour income, net | -5,925 | -5,899 | -5,896 | -5,994 | -5,986 |
Receipts | 627 | 627 | 627 | 627 | 627 |
Expenses | 6,552 | 6,526 | 6,523 | 6,621 | 6,613 |
Investment income, net | 10,790 | 7,855 | 4,365 | 6,334 | 10,611 |
Receipts | 42,867 | 35,808 | 34,196 | 28,301 | 38,964 |
Expenses | 32,077 | 27,953 | 29,831 | 21,967 | 28,353 |
Secondary income, net | -2,287 | -2,344 | -2,793 | -2,906 | -2,312 |
Receipts | 10,290 | 11,245 | 11,518 | 10,896 | 10,942 |
Expenses | 12,577 | 13,588 | 14,312 | 13,802 | 13,254 |
Capital account, net | 1,358 | 4,986 | -84 | 40 | 130 |
Receipts | 1,726 | 6,697 | 194 | 145 | 214 |
Expenses | 368 | 1,711 | 278 | 105 | 84 |
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Financial account (excluding derivatives), net | 899 | 37,471 | 20,972 | -2,340 | 5,719 |
Net acquisition of financial assets | -29,970 | -17,917 | 8,975 | -40,908 | 10,974 |
Net incurrence of liabilities | -30,869 | -55,388 | -11,996 | -38,568 | 5,256 |
Direct investment, net | 15,871 | 26,906 | 24,268 | -1,173 | 6,864 |
Net acquisition of financial assets | 18,855 | 10,709 | 3,443 | -16,497 | 3,241 |
Net incurrence of liabilities | 2,984 | -16,197 | -20,826 | -15,324 | -3,623 |
Portfolio investment, net | -13,427 | 6,741 | -5,145 | 7,232 | -10,929 |
Net acquisition of financial assets | -15,153 | -500 | -11,229 | 2,500 | -2,277 |
Net incurrence of liabilities | -1,726 | -7,241 | -6,084 | -4,732 | 8,653 |
Other investment, net | -4,174 | -1,057 | -941 | -10,681 | 7,163 |
Net acquisition of financial assets | -36,301 | -33,007 | 13,973 | -29,193 | 7,389 |
Net incurrence of liabilities | -32,127 | -31,950 | 14,913 | -18,512 | 226 |
Reserve assets, net | 2,629 | 4,882 | 2,789 | 2,281 | 2,621 |
Derivatives, net | 908 | -339 | 271 | 172 | -146 |
Statistical difference | -21,273 | 15,319 | 5,877 | -22,761 | -15,831 |
- Foreign trade according to Federal Customs Administration (FCA).
- Additions: unchecked goods trade, small consignments, goods procured in ports. Subtractions:cross-border processing traffic, returned goods, CIF/FOB adjustment on imports.
Source: SNB
SWITZERLAND'S INTERNATIONAL INVESTMENT POSITION - OVERVIEW
In CHF millions
2018 Q2 | 2018 Q3 | 2018 Q4 | 2019 Q1 | 2019 Q2 | |
Assets | 4,869,174 | 4,794,024 | 4,784,826 | 4,797,844 | 4,804,093 |
Direct investment | 1,733,056 | 1,720,840 | 1,724,643 | 1,693,485 | 1,683,468 |
Portfolio investment | 1,366,429 | 1,357,221 | 1,321,571 | 1,371,271 | 1,378,857 |
Derivatives | 98,940 | 98,790 | 106,779 | 89,300 | 92,269 |
Other investment | 875,147 | 833,146 | 855,336 | 838,396 | 838,124 |
Reserve assets | 795,602 | 784,027 | 776,498 | 805,392 | 811,376 |
Liabilities | 4,014,588 | 3,979,346 | 3,900,667 | 3,978,181 | 4,007,887 |
Direct investment | 1,569,513 | 1,546,578 | 1,527,097 | 1,512,761 | 1,513,404 |
Portfolio investment | 1,111,898 | 1,152,225 | 1,070,345 | 1,186,167 | 1,220,330 |
Derivatives | 105,199 | 101,441 | 107,511 | 92,876 | 92,209 |
Other investment | 1,227,978 | 1,179,102 | 1,195,715 | 1,186,377 | 1,181,943 |
Net international investment position | 854,586 | 814,678 | 884,159 | 819,663 | 796,206 |
Direct investment | 163,543 | 174,262 | 197,546 | 180,724 | 170,063 |
Portfolio investment | 254,531 | 204,996 | 251,226 | 185,104 | 158,527 |
Derivatives | -6,258 | -2,651 | -732 | -3,576 | 60 |
Other investment | -352,831 | -345,956 | -340,380 | -347,981 | -343,820 |
Reserve assets | 795,602 | 784,027 | 776,498 | 805,392 | 811,376 |
Source: SNB
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SNB - Schweizerische Nationalbank published this content on 20 September 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 September 2019 10:11:07 UTC