22.12.2014, 13:58
Balance of payments and international investment position in Q3 2014
OREANDA-NEWS. In the third quarter of 2014, the current account surplus amounted to CHF 11 billion, CHF 8 billion less than in the year - earlier quarter. This decline was mainly attributable to investment income, the surplus of which shrank by CHF 7 billion year on year to CHF 3 billion. The surplus of expenses on secondary income (current transfers) increased by CHF 1 billion. The net position from trade in goods and services remained unchanged at CHF 17illion.
Transactions in foreign assets and liabilities reported in the financial account were minimal. On the assets side, the financial account registered a net reduction of CHF 1 billion compared with a net acquisition of CHF 51 CHF in the year - earlier quarter. The liabilities side showed a net incurrence of CHF 1 billion, compared with CHF 7 billion a year earlier.
In the international investment position, stocks of assets increased by CHF 107 billion to CHF 4,067 billion compared to the second quarter of 2014. This was mainly attributable to the appreciation of foreign currency positions. Foreign liabilities rose by CHF 67 billion to CHF 3,283 billion. This was largely due to higher share prices. As a result, the net international investment position grew by CHF 40 billion to CHF 784 billion.
Current account
Net
In the third quarter of 2014, the current account surplus fell compared to the year - back level, by CHF 8 billion to CHF 11 billion. This was largely attributable to direct investment income, which receded by CHF 3 billion to CHF 25 billion on the receipts side and increased by CHF 4 billion to CHF 22 billion on the expenses side. In addition, at CHF 4 billion, secondary income (current transfers) registered an expenses surplus growth of CHF 1 billion. By contrast, the receipts surplus from goods trade and trade in services remained at CHF 12 billion and CHF 5 billion respectively.
Receipts
According to the foreign trade statistics (special trade total 1), goods exports grew by CHF 2 billion to CHF 52 billion. Decisive for the rise were exports by the chemical/pharmaceutical industry. Net merchanting receipts decreased by CHF 1 billion to CHF 6 billion. Receipts from non - monetary gold trading were considerably lower. After having amounted to CHF 27 billion a year earlier, they totalled CHF 13 billion. Experience has shown that receipts from gold trading are subject to considerable fluctuations. Overall, i.e. including merchanting and gold trading, receipts from goods trade amounted to CHF 71 billion, CHF 14 billion lower than in the year - earlier quarter. As regards trade in services with foreign countries, receipts fell by CHF 1 billion to CHF 26 billion compared to the year - back quarter. Besides financial services, insurance services, maintenance and repair services as well as licence fees recorded lower receipts. As a result of lower receipts from direct investment abroad, primary income (labour income and investment income) receded by CHF 3 billion to CHF 25 billion. Secondary income (current transfers) fell by CHF 1 billion to CHF 8 billion year-on-year.
Expenses
According to the foreign trade statistics (special trade total 1), goods imports grew by CHF 1 billion to CHF 44 billion. This was mainly due to higher imports of consumer goods. Imports of raw materials, semi-manufactures and capital goods also expanded. By contrast, imports of energy sources declined, largely as a result of higher prices. Expenses for non-monetary gold trading amounted to CHF13 billion compared to CHF 27 billion a year earlier. Overall, expenses for goods imports dropped byCHF 13 billion to CHF 59 billion. At CHF 21 billion, expenses for services imports were CHF 1 billion lower than in the year-back quarter. Expenses for financial services, insurance and transportation services, licence fees as well as maintenance and repair recorded a decline.
Expenses for primary income rose by CHF 4 billion to CHF 27 billion. This was primarily due to higher income from direct investment in Switzerland. At CHF 12 billion, expenses from secondary income were at the same level as a year earlier.
Financial account
Net acquisition of financial assets
Financial assets posted a net reduction of CHF1 billion (Q3 2013: net acquisition of CHF 51 billion). Direct investment recorded a net reduction of CHF 4 billion as a result of Swiss companies selling subsidiaries abroad (Q3 2013: net acquisition of CHF 6 billion). The ‘other investment’ item also registered a net reduction (–CHF 2 billion); the third quarter of 2013 had seen a net acquisition of CHF 39 billion, especially at banks. As regards portfolio investment, Swiss investors purchased foreign - issued securities amounting to CHF 4 billion, mainly in the form of debt securities. Reserve assets also saw a net acquisition of financial assets (CHF 1 billion).
Net incurrence of liabilities
Net incurrence of liabilities was CHF 1 billion (Q3 2013: CHF7 billion). Portfolio investment recorded a net incurrence of liabilities in the amount of CHF 4 billion (Q3 2013: CHF 1 billion), with investors abroad mainly purchasing equity securities of Swiss issuers. Liabilities of the ‘other investment’ item were increased by CHF 1 billion (Q3 2013: CHF 15 billion). Commercial banks saw an incurrence of liabilities, whereas companies experienced a reduction of liabilities. SNB lending recorded a net incurrence of liabilities of CHF 1 billion. Direct investment registered a net reduction of CHF 4 billion (Q3 2013: CHF – 9 billion), due to investors abroad selling companies in Switzerland and reducing liabilities in intragroup lending.
Financial account, net
The net financial account balance comprises the net acquisition of financial assets minus the net incurrence of liabilities plus net derivatives transactions. Net derivatives were CHF 1 billion, whereas the third quarter of last year saw a balanced result. This resulted in a net financial account loss of CHF – 1 billion (Q3 2013: CHF 44 billion). This balance correspondsto the decrease in the net investment position resulting from cross - border investment.
Transactions in foreign assets and liabilities reported in the financial account were minimal. On the assets side, the financial account registered a net reduction of CHF 1 billion compared with a net acquisition of CHF 51 CHF in the year - earlier quarter. The liabilities side showed a net incurrence of CHF 1 billion, compared with CHF 7 billion a year earlier.
In the international investment position, stocks of assets increased by CHF 107 billion to CHF 4,067 billion compared to the second quarter of 2014. This was mainly attributable to the appreciation of foreign currency positions. Foreign liabilities rose by CHF 67 billion to CHF 3,283 billion. This was largely due to higher share prices. As a result, the net international investment position grew by CHF 40 billion to CHF 784 billion.
Current account
Net
In the third quarter of 2014, the current account surplus fell compared to the year - back level, by CHF 8 billion to CHF 11 billion. This was largely attributable to direct investment income, which receded by CHF 3 billion to CHF 25 billion on the receipts side and increased by CHF 4 billion to CHF 22 billion on the expenses side. In addition, at CHF 4 billion, secondary income (current transfers) registered an expenses surplus growth of CHF 1 billion. By contrast, the receipts surplus from goods trade and trade in services remained at CHF 12 billion and CHF 5 billion respectively.
Receipts
According to the foreign trade statistics (special trade total 1), goods exports grew by CHF 2 billion to CHF 52 billion. Decisive for the rise were exports by the chemical/pharmaceutical industry. Net merchanting receipts decreased by CHF 1 billion to CHF 6 billion. Receipts from non - monetary gold trading were considerably lower. After having amounted to CHF 27 billion a year earlier, they totalled CHF 13 billion. Experience has shown that receipts from gold trading are subject to considerable fluctuations. Overall, i.e. including merchanting and gold trading, receipts from goods trade amounted to CHF 71 billion, CHF 14 billion lower than in the year - earlier quarter. As regards trade in services with foreign countries, receipts fell by CHF 1 billion to CHF 26 billion compared to the year - back quarter. Besides financial services, insurance services, maintenance and repair services as well as licence fees recorded lower receipts. As a result of lower receipts from direct investment abroad, primary income (labour income and investment income) receded by CHF 3 billion to CHF 25 billion. Secondary income (current transfers) fell by CHF 1 billion to CHF 8 billion year-on-year.
Expenses
According to the foreign trade statistics (special trade total 1), goods imports grew by CHF 1 billion to CHF 44 billion. This was mainly due to higher imports of consumer goods. Imports of raw materials, semi-manufactures and capital goods also expanded. By contrast, imports of energy sources declined, largely as a result of higher prices. Expenses for non-monetary gold trading amounted to CHF13 billion compared to CHF 27 billion a year earlier. Overall, expenses for goods imports dropped byCHF 13 billion to CHF 59 billion. At CHF 21 billion, expenses for services imports were CHF 1 billion lower than in the year-back quarter. Expenses for financial services, insurance and transportation services, licence fees as well as maintenance and repair recorded a decline.
Expenses for primary income rose by CHF 4 billion to CHF 27 billion. This was primarily due to higher income from direct investment in Switzerland. At CHF 12 billion, expenses from secondary income were at the same level as a year earlier.
Financial account
Net acquisition of financial assets
Financial assets posted a net reduction of CHF1 billion (Q3 2013: net acquisition of CHF 51 billion). Direct investment recorded a net reduction of CHF 4 billion as a result of Swiss companies selling subsidiaries abroad (Q3 2013: net acquisition of CHF 6 billion). The ‘other investment’ item also registered a net reduction (–CHF 2 billion); the third quarter of 2013 had seen a net acquisition of CHF 39 billion, especially at banks. As regards portfolio investment, Swiss investors purchased foreign - issued securities amounting to CHF 4 billion, mainly in the form of debt securities. Reserve assets also saw a net acquisition of financial assets (CHF 1 billion).
Net incurrence of liabilities
Net incurrence of liabilities was CHF 1 billion (Q3 2013: CHF7 billion). Portfolio investment recorded a net incurrence of liabilities in the amount of CHF 4 billion (Q3 2013: CHF 1 billion), with investors abroad mainly purchasing equity securities of Swiss issuers. Liabilities of the ‘other investment’ item were increased by CHF 1 billion (Q3 2013: CHF 15 billion). Commercial banks saw an incurrence of liabilities, whereas companies experienced a reduction of liabilities. SNB lending recorded a net incurrence of liabilities of CHF 1 billion. Direct investment registered a net reduction of CHF 4 billion (Q3 2013: CHF – 9 billion), due to investors abroad selling companies in Switzerland and reducing liabilities in intragroup lending.
Financial account, net
The net financial account balance comprises the net acquisition of financial assets minus the net incurrence of liabilities plus net derivatives transactions. Net derivatives were CHF 1 billion, whereas the third quarter of last year saw a balanced result. This resulted in a net financial account loss of CHF – 1 billion (Q3 2013: CHF 44 billion). This balance correspondsto the decrease in the net investment position resulting from cross - border investment.
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