Switzerland's exports are worth over two-thirds of GDP. So when the Swiss central bank gave up holding down the value of the Swiss franc against the euro in January, exports and growth looked set to suffer. Yet according to one think tank, exports should climb by 1.5% in 2015. How?
For starters, says The Economist, the eurozone's share of Swiss exports has declined from 55% to 44% in the past decade, and the franc has risen far less against the pound and the US dollar. Sales to the Middle East have also grown. But the key point is that Switzerland has lots of pricing power in its exports because of its products' high-quality reputation.
There are few substitutes for its watches, banks, pharmaceuticals and ski slopes. This is largely why Swiss exports have tripled in real terms in the past 30 years, even as the trade-weighted franc has climbed by 130%. "The Swiss just learn to get better," as one expatriate puts it.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Water companies blocked from using customer money to pay “undeserved” bonusesThe regulator has blocked three water companies from using billpayer money to pay £1.5 million in exec bonuses
-
Will the Bitcoin price hit $100,000?With Bitcoin prices trading just below $100,000, we explore whether the cryptocurrency can hit the milestone.
-
The charts that matter: bond yields and US dollar continue to climbCharts The US dollar and government bond yields around the world continued to climb. Here’s what happened to the charts that matter most to the global economy.
-
The charts that matter: markets start the year with a crashCharts As markets start 2022 with a big selloff, here’s what happened to the charts that matter most to the global economy.
-
The charts that matter: Fed becomes more hawkishCharts Gold rose meanwhile the US dollar fell after a key Fed meeting. Here’s what else happened to the charts that matter most to the global economy.
-
The charts that matter: a tough week for bitcoinCharts Cryptocurrency bitcoin slid by some 20% this week. Here’s what else happened to the charts that matter most to the global economy.
-
The charts that matter: omicron rattles marketsCharts Markets were rattled by the emergence of a new strain of Covid-19. Here’s how it has affected the charts that matter most to the global economy.
-
The charts that matter: the US dollar keeps on strengtheningCharts The US dollar saw further rises this week as gold and cryptocurrencies sold off. Here’s how that has affected the charts that matter most to the global economy.
-
The charts that matter: gold hangs on to gains while the dollar continues higherCharts The gold price continued to hang on to last week’s gains, even as the US dollar powered higher this week. Here’s how that has affected the charts that matter most to the global economy.
-
The charts that matter: inflation fears give gold a much needed boostCharts US inflation hit its highest in 30 years this week, driving gold and bitcoin to new highs. Here’s how that has affected the charts that matter most to the global economy.
