This brings me to the factors contributing to the persistent current account surplus in Switzerland. Factors contributing to the persistent current account surplus in Switzerland Switzerland’s current account surplus, reported in accordance with international standards, is driven by special factors. First, our current account surplus or savings surplus is overstated due to statistical distortions. Second, structural factors are in play that tend to contribute to a savings surplus. One of these is demographics, which have a decisive impact on the high levels of household saving in Switzerland. 5  High current account deficits may occasionally lead to refinancing problems, so-called balance of payments crises. This speech does not address the financing side of current account deficits in any detail, but focuses solely on the current debate concerning exchange rate manipulation in connection with current account surpluses. Page 7/13  Then, third, we must consider the industrial structure of the Swiss economy, which means that the current account and the economy as a whole do not necessarily move in parallel when the exchange rate changes. In Switzerland, two industries are largely responsible for the trade surplus, namely pharmaceuticals and merchanting, the net exports of which are only slightly impacted by exchange rate movements. At the same time, these two industries are much more important for the development of the current account than for that of the economy as a whole. Let me now explain these three factors in more detail. Statistical distortions Statistical distortions in the current account lead to the surplus in Switzerland being overstated.

They result from errors or omissions in the data which inevitably occur given the many different data sources for such statistics. Capital transfers should also be taken into account, but they have been excluded here for the sake of simplicity. Page 4/13  surplus increased significantly until the onset of the financial crisis. During the crisis, the current account balance fluctuated sharply. In recent years, the surplus has stabilised at 8–11% of GDP, and in 2016, as I said earlier, it stood at some 10%. Since Switzerland consistently generates a current account surplus, one would expect the net international investment position to rise over time. However, chart 2 shows quite clearly that this is not the case. The chart depicts Switzerland’s net international investment position during the period 2000–2016, again relative to GDP. We can see large fluctuations from year to year that cannot be explained by developments in the current account surplus. If these fluctuations are factored out, it becomes clear that the net international investment position has not increased significantly over the observation period. The high fluctuations illustrate how important the other influencing variables already mentioned are in the development of the net international investment position. I will go into this in more detail later. Let me just add something here: Although the net international investment position has not increased, Switzerland’s gross claims and liabilities abroad have continued to rise, particularly since the 1990s.