In 2016, Switzerland’s foreign assets were almost seven times its GDP, while its foreign liabilities were more than five times its GDP. By international standards, Switzerland continues to rank well above the average in terms of its integration with the global economy, not only in relation to trade in goods and services but also in relation to portfolio and direct investment. As we saw earlier, the current account balance corresponds to the difference between savings and domestic investment. In the international perspective, it is often argued that countries with current account surpluses invest too little or save too much. Where does Switzerland fit in here? Chart 3 shows average saving and investment rates during the period 2010–2015 in various groups of countries and in Switzerland. Saving rates are depicted in red, investment rates in blue. As the chart shows, while Switzerland invests relatively heavily by international standards, it also saves far more than other countries. At 24%, Switzerland’s investment rate exceeds the average for both the advanced economies and the OECD countries; and, at 36%, our saving rate is among the very highest. Switzerland’s high investment rate shows that the current account surplus is far more a function of a comparatively high saving rate than of low domestic investment. Global current account balances Let me now give you an overview of the chronological and geographical development of global current account surpluses and deficits.
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.