Current account

Map 1. Current account balance as a ratio to gross domestic product, 2020
(Percentage)

Current account imbalances across the world

Receipts earned by economies from transactions with other economies often differ significantly from the payments made. In 2020, for most economies in America, Africa, South-Eastern Europe, and Central and Western Asia, payments exceeded receipts, leading to negative current account balances. Higher surpluses were found mainly in Central, Northern and Eastern Europe, Eastern Asia, and Oceania. Most economies in the South of African continent also achieved positive current account balances.

In 2020, Kuwait recorded the highest current account surplus relative to GDP (30 per cent). Tuvalu, Guinea, and Papua New Guinea enjoyed surpluses close to 20 per cent of their respective GDP.

In absolute terms, the United States of America (US$616 billion) and the United Kingdom (US$95 billion) ran the world’s largest current account deficits. China (US$274 billion) had the largest absolute surplus, followed by Germany (US$266 billion) and Japan (US$164 billion).

Recent developments

In 2020, the current account surplus of developing economies doubled (US$438 billion) compared with 2019 (US$213 billion), although their surplus of trade in goods and services showed a slight decrease (from US$335 million to US$317 million). Geographically, the increase in the current account balance can largely be attributed to a growing surplus in developing economies of Asia and Oceania (from US$406 billion to US$531 billion), combined with a shrinking deficit in developing economies in America (from US$102 billion to US$2 billion). The current account surplus of developed economies fell to only US$5 billion in 2020, from US$197 billion recorded for the year before.

Figure 1. Balances in the current account
(Billions of United States dollars)

Note: Current account deficits and surpluses do not add up to zero at the world level, due to imperfect geographic coverage and cross-country differences in compilation methods.

Least developed countries keep lowering their deficit

Figure 2. Balances in least developed countries’ current accounts
(Billions of United States dollars)

After five years of continuous decline, the current account balance of LDCs shows an increasing trend since 2015, resulting in a reduction of their deficit by almost a half, from US$60 billion to US$33 billion. The trade deficit has nevertheless remained at around US$100 billion.

Greater relative current account deficit, accounting for 2.9 per cent of GDP in 2020, distinguishes LDCs from other developing economies, which, as a group, ran a surplus of 1.3 per cent of GDP. Higher deficits relative to GDP were registered for the groups of heavily indebted poor countries (HIPCs) (4.2 per cent) and landlocked developing countries (LLDCs) (3.2 per cent). As a group, small island developing States (SIDS) registered a comfortable 7 per cent surplus. Yet, some SIDS faced deficits close to, or over, 20 per cent of GDP.

Concepts and definitions

The current account, within the balance of payments, displays the transactions between residents and non-residents of a reporting economy, involving economic values, namely the cross-national exchange of goods and services as well as cross-national transfers of primary and secondary income.

The current account balance shows the difference between the sum of exports and income receivable, and the sum of imports and income payable, where exports and imports refer to both goods and services, while income refers to both primary and secondary income. A surplus in the current account is recorded when receipts exceed payments; a deficit is recorded when payments exceed receipts.

The current account data in this section correspond to the latest reporting standard, known as BPM6, defined by the -—
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Summary tables

Table 1. Current account balance by group of economies
Note: Current account deficits and surpluses do not add up to zero across groups of economies, due to imperfect geographic coverage and cross-country differences in compilation methods.

    Table 2. Current account balance in largest surplus and deficit economies
      Table 3. Current accounts of leading exporters (goods and services) by group of economies, 2020
      (Percentage)
      Developed economies
        Developing economies
          Developing economies: Africa
            Developing economies: America
              Developing economies: Asia and Oceania

                References

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