People like Ken Rogoff talked about global imbalances in the current account deficit not being sustainable.
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But now the current account deficit is no longer covered by foreign direct investment.
But the government will have to reduce the current account deficit and be wary of economic overheating.
Stateside, the trade imbalance between the values of what America imports and exports is known as the current account deficit.
Rate cuts could potentially widen the current account deficit by encouraging consumption and boosting demand for imported goods.
I've mentioned it often enough in the past, along with the likely rise in the current account deficit last year.
The current account deficit runs 3 to 5 percent of GDP (up from less than 0.5 percent at its weakest in the early 1970s).
Thanks to the dollar's stability, liquidity and low transaction costs, the U.S. has an edge in attracting capital inflows to finance the current account deficit.
"The current account deficit remains the biggest risk to the economy, " and could warrant a swift reversal of its policy stance, the RBI said on Friday.
The current account deficit will likely narrow to 4.7% of gross domestic product in the current fiscal year from an estimated 5.1% last year, he said.
The current account deficit basically reflects capital imports and exports, or, to put it a slightly different way, the difference between domestic savings and domestic investment.
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Analysts give diverse reasons for the meltdown, most pointing to the current account deficit fueled by numerous infrastructure mega-projects that rely on external financing in U.S. dollars.
The country's huge demand for gold is one of the primary reasons for its large import bill, which has led to a widening of the current account deficit.
Mr. Rangarajan expects the current account deficit in this fiscal year, which ends March 31, to be at a record high of around 5% of gross domestic product.
India also needs to keep rates high enough to attract foreign capital and offset the current account deficit, in order to keep the rupee from weakening and making inflation worse.
As of 1989, the last full year before she was ousted by her own party in May of 1990, the current account DEFICIT had reached an appalling 3.9 percent of GDP.
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Jobs have shrunk, the economy is crawling, inflation and interest rates remain high, the current account deficit is threatening, manufacturing has hit the buffers and skittish bureaucrats privately complain of "policy paralysis".
PUNE--India's biggest economic concern is the current account deficit, because the government has to rely on volatile capital inflows to make up the shortfall, the chief economic adviser to the finance ministry said Tuesday.
As such, recent trends in trade flows and the balance of payments suggest that the current account deficit for this fiscal year will likely reach a record of about 5% of GDP before narrowing closer to 4% next year.
The current-account deficit, now around 5% of GDP, is a key factor: if capital flows into America slowed even more sharply, or dried up, the adjustment involved in reducing the current-account deficit could be painful both for America and the rest of the world.
The current account deficit has likewise fallen, meaning now that almost all of the country's massive budget deficit is being financed by its own citizens (though of course a significant chunk of the accumulated debt stock is foreign held - notably by Asian central banks).
According to Martin Neil Baily, a senior fellow at the Peterson Institute for International Economics in Washington, the "striking thing" about last year's report was that it painted a rosy view of the trade imbalance by focusing on the capital account surplus, rather than its inverse, the current account deficit.
The average current account deficit of the four periphery economies now under pressure was 7% of national income in 2010.
Economic policymakers typically argue that the US current account deficit, the fact that the nation imports more than it exports, is sustainable because it has a large internal market.
The current account is in surplus, but at some point a falling trade balance could send the current account into deficit, creating huge dangers and risk of macro financial market disruption.
The current-account deficit is no more than the accounting counterpart of that net inflow of capital.
The country, its companies and its citizens are all weighed down with debt, which is why the current-account deficit is so high and the dollar is having a tough time of it.
"The high current account deficit limits room for further easing, and the slowdown in growth is structural and due to supply-side issues, and should be addressed through reforms by the government, " said Leif Eskesen, chief economist for India and Asean at HSBC.
The current-account deficit has nevertheless exerted significant downward pressure on the dollar already.
"UK debt is 56% of national income, Greek debt is almost twice that about 115%... when it comes to growth the Greek economy is expected to be in recession to the tune of 2.5% this year and 3.5% next year, while the British economy is actually growing and... the UK current account deficit is less than 2% of GDP of national income, the Greek figure is about 10%".
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