Current account deficit

How it is used

A key figure in emerging-market news, reported monthly and as a share of GDP. The deficit has to be financed by borrowing from abroad or by foreign investment, so a large one can leave a currency vulnerable. It widens, narrows or turns into a surplus.

Example sentences

1. The current account deficit narrowed to 2% of GDP as tourism revenue rose.

2. Energy imports are the main driver of the country's current account deficit.

Common collocations

• a wide current account deficit
• finance the current account deficit
• current account surplus
• narrow the current account deficit

Related terms

• balance of paymentsA record of all money flows between a country and the rest of the world over a period, divided into the current account and the capital and financial account.
• trade deficitThe gap that appears when the value of a country's imports of goods, and sometimes services, is greater than the value of its exports over a period.
• exchange rateThe price of one currency expressed in another, for example how many Turkish lira you need to buy one US dollar or one euro.
• foreign direct investmentInvestment by a company from one country that gives it a lasting interest and control in a business in another country, such as building a factory.
• budget deficitThe gap that appears when a government spends more than it collects in taxes and other revenue during a year; it is usually covered by borrowing.

More terms: Trade and Exchange Rates

• export
• import
• tariff
• depreciation
• devaluation
• comparative advantage
• protectionism
• free trade
• currency
• appreciation
• globalisation
• trade balance