GENEVA, April 23, 2009 (AFP) - Switzerland's trade surplus was cut by over 27 percent in the first quarter due in part to a boom in imports of gold ornaments from Asia that are being melted down and made into bullion, data showed Thursday 23 April.

Swiss imports from Asia rose 43 percent due to a surge in the purchase of ornaments from Vietnam, described as an "Asian gold rush" by the Swiss federal customs office.

Swiss gold refiners such as Argor-Heraeus have reported a surge in demand for bullion as worried investors turn to hoarding gold bars, an age-old insurance in times of war or calamities.

Exports of items such as Switzerland's famous luxury watches fell sharply, hit by the global financial crisis which has reduced demand for high-end consumer products, the data from the customs office showed.

The trade surplus for the period reached 2.9 billion Swiss francs (1.9 billion euros, 2.5 billion dollars), a fall of 27.2 percent year on year, the Swiss federal customs office said in a statement.

Overall exports and imports fell by more than ten percent while trade with the European Union, Switzerland's largest trading partner, fell by more than one seventh year-on-year, the customs authority said in a statement.

These figures were the "worst result in ages," said the customs office.

Eight principal exporting sectors out of ten were hit by the decline, with Swiss watchmakers suffering a 23 percent drop in exports. Metals exports fell by 34 percent and textiles were down 28 percent.

The decline in Swiss watch exports accelerated in March, according to the Federation of Swiss Watch Industry.

"The value of products leaving Switzerland fell by 26.6 percent compared to March 2008," said the federation.

Worst hit were volume of exports watches costing between 500 and 3,000 francs, which fell by over 30 percent, while those costing over 3,000 francs fell by over 20 percent.

Export volumes of the cheapest range of watches below 200 francs also fell by over 10 percent.

Only those costing between 200 and 500 francs held up, with an increase of about 9 percent by export volume.

Export-dependant Switzerland is sinking into a deep recession this year, with the economy projected to shrink 2.2 percent before a slight recovery in 2010, the Swiss economy ministry has forecast.