DEMO content for development and layout testing — not real editorial reporting.
The current account records trade in goods and services plus income flows with the rest of the world. An accounting identity links it to the gap between national saving and domestic investment.
How it works
A country that invests more than it saves must borrow the difference from abroad, which shows up as a current-account deficit; one that saves more than it invests lends abroad and runs a surplus.
A country’s trade surplus or deficit is the mirror image of decisions about saving and investment at home.
What to watch
Imbalances are not necessarily a problem. They become a concern when they are large and persistent, financed by short-term capital, or driven by distortions such as managed exchange rates.
Key concepts
- Trade
- Current account
