IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

CHF Strength and Swiss Export Performance – Evidence and Outlook From a Disaggregate Analysis

Listed author(s):

Why has Swiss export performance been so strong during the past quarters despite the marked appreciation of the CHF? What is the outlook for Swiss exports given the still elevated CHF? In this paper, we shed light on these questions by analyzing a panel of Swiss exports disaggregated along both the regional and the industry dimension. To explain the export performance of the recent past, we estimate how the exchange rate and demand growth in each export market affect trade flows and also, how this varies across different industries. The appreciation of the CHF has considerably dampened Swiss export performance. As a counterfactual, we ask how Swiss exports would have developed had the CHF stayed flat against other currencies during the 5 years leading up to October 2010. Compared to this scenario, the Swiss export industry has already lost a cumulative of CHF 35 billion in revenues due to the CHF appreciation. At the current juncture, monthly exports are reduced by CHF 2.7 billion (around 17%). We show that the key reason for the strong export performance despite the CHF strength was the rebound in global demand in the aftermath of the financial crisis. Moreover, we also document that the timing of global demand growth has completely masked the effect of the CHF strength: during the last quarters, periods of pronounced CHF appreciation always coincided with strong recovery of global demand. Failure to account for this coincidence could lead to the wrong assumption that the exchange rate matters very little for Swiss export performance. Last, to gauge the likely evolution of Swiss exports and their regional composition in the years to come, we combine our estimation results with the regional GDP and exchange rate forecasts provided by the Swiss National Bank. Following this approach, we predict that over the next three years, Swiss exports will rise a combined 16%, with little less than half of this increase going to Emerging Asia and 30% to the euro zone. We also document the key industries that will drive Swiss export growth in the near future.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: Full text
Download Restriction: None

Paper provided by Swiss National Bank, Study Center Gerzensee in its series Working Papers with number 11.03.

in new window

Length: 16 pages
Date of creation: Apr 2011
Handle: RePEc:szg:worpap:1103
Contact details of provider: Postal:
Studienzentrum Gerzensee, Postfach 21, 3115 Gerzensee

Phone: ++41 (0)31 780 31 31
Fax: ++41 (0)31 780 31 00
Web page:

Order Information: Postal: Studienzentrum Gerzensee, Postfach 21, 3115 Gerzensee

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:szg:worpap:1103. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (library)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.