Current account

by Sonia Blachier · June 7, 2021

Map 1. Current account balance as a ratio to gross domestic product, 2021

(Percentage)

Current account imbalances across the world

Receipts earned by economies from transactions with other economies often differ significantly from the payments made. In 2021, for most economies in the Americas, 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 and Northern Europe, Eastern Asia, and Oceania. Most economies in Europe and South-Eastern Asia recorded relatively balanced current accounts.

In 2021, Guinea and Papua New Guinea recorded the highest current account surpluses relative to GDPgross domestic product (above 20 per cent). Singapore, Kiribati, Kuwait, and Azerbaijan enjoyed surpluses of over 15 per cent of their respective GDP.

In absolute terms, the United States of America (US$822 billion) and the United Kingdom (US$83 billion) ran the world’s largest current account deficits. China (US$317 billion) recorded the largest absolute surplus, followed by Germany (US$314 billion) and Japan (US$142 billion).

In 2021, the current account surplus of developing economies stood at US$480 billion, more than triple the amount recorded for 2019 (US$152 billion). Geographically, the increase in the current account balance can largely be attributed to a growing surplus in developing economies of Asia and Oceania. This group of economies recorded about US$100 billion rise each year since 2018. This was combined with a shrinking deficit in developing economies in America. The current account surplus of developed economies was recorded at US$230 billion in 2021.

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’ deficit up in 2021

Figure 2. Balances in least developed countries’ current account

(Billions of United States dollars)

After five years of almost continuous decline of LDCs’ current account deficit since 2015, resulting in its reduction by almost a half, from US$60 billion to US$31 in 2020, in 2021, their current account deficit rose again to US$55 billion. The trade deficit also increased, surpassing US$100 billion.

Greater relative current account deficit, accounting for 4.6 per cent of GDP in 2021, distinguishes LDCsleast developed countries 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 (HIPCsheavily indebted poor countries) (3.7 per cent) and landlocked developing countries (LLDCslandlocked developing countries) (2.9 per cent). As a group, SIDSsmall island developing States registered a comfortable 9 per cent surplus. Yet, some SIDS faced deficits close to, or over, 25 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 BPM6Balance of Payments and International Investment Position Manual, Sixth Edition, 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 at the world level, 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, 2021

Developed economies

Developing economies

Developing economies: Africa

Developing economies: Americas

Developing economies: Asia and Oceania

References

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