A current account deficit is not always detrimental to a nation's economy—external debt may be used to finance lucrative investments. Investopedia / Michela Buttignol Understanding a Current Account Deficit A country can reduce its existing debt by increasing the value of its exports relative to ...
the current account balance often displays a cyclical trend. During a strongeconomic expansion, import volumes typically surge; if exports are unable to grow at the same rate, the current account deficit will widen. Conversely, during a recession, the current...
However,economistsseedeficitsdifferently.Whenmoneyistakenawayinoneplace,itbecomesacreditsomeplaceelse.Itallmustbalance.Thisdoesnotmeanthatdeficitsaregoodnecessarily.Itjustmeansthatadeficitshowsthatanothereconomicactivityisincreasing.Investopediaexplains CurrentAccountDeficit Asubstantialcurrentaccountdeficitisnotnecessarilya...
The terms "current account deficit" and "trade deficit" are often used interchangeably, but they have substantially different meanings. A nation has a trade deficit when it spends more on imports than it earns on exports. A nation's current account deficit is a broader measure. The tr...
The current account of the balance of payments includes a country's key activity, such as capital markets and services. The current account balance should theoretically be zero, which is impossible, so in reality, it will tell whether a country is in a surplus or deficit. ...
The current account of the balance of payments includes a country's key activity, such as capital markets and services. The current account balance should theoretically be zero, which is impossible, so in reality, it will tell whether a country is in a surplus or deficit. ...
What Is a Current Account Surplus? A current account surplus is a positivecurrent account balance, indicating that a nation is a net lender to the rest of the world. A current account surplus can be contrasted with acurrent account deficit. ...
If imports decline and exports increase to stronger economies during a recession, the country's current account deficit drops. But if exports stagnate as imports grow when the economy grows, the current account deficit grows. Capital Account ...