Current account
Current account imbalances across the world
In 2022, for many economies in the Americas, in Africa, and in South and South-East Asia, payments made for transactions with other economies exceeded their receipts earned, leading to negative current account balances. By contrast, most economies in Western, Central and Eastern Asia recorded current account surpluses.
Since 2019, developing economies have recorded a growing surplus in trade in goods vis-à-vis the developed economies, and their deficit in trade in services has decreased.
In 2022, Guyana recorded the highest current account surplus relative to GDPgross domestic product (40 per cent). Norway, Kuwait, Azerbaijan, and Papua New Guinea enjoyed surpluses of over 30 per cent of their respective GDPgross domestic product.
In absolute terms, the United States of America ($944 billion), the United Kingdom ($121 billion), and India ($80 billion) ran the world's largest current account deficits. China ($402 billion) recorded the largest absolute surplus, followed by the Russian Federation ($233 billion) and Norway ($175 billion).
Rise in developed economies' current account deficit
In 2022, the current account surplus of developing economies reached $675 billion. Its increase can mainly be attributed to a growing surplus in developing economies of Asia. Asian developing economies recorded about $100 billion rise, annually, in their current account surplus in 2019 and 2020, followed by some $200 billion rise, annually, in 2021 and 2022.
Developed economies reported $336 billion deficit for 2022, a change of over $600 billion from a surplus of $277 billion recorded for 2021. Although this deficit was high in terms of current dollar values as percentage of GDPgross domestic product, at 0.56 per cent, it was far from the record relative deficit of 1.53 per cent measured in 2008.
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’ combined deficit increased in 2021 and again in 2022
The least developed countries’ (LDCsleast developed countries) current account deficit was shrinking from 2015 till 2020, resulting in its reduction by almost a half, from $60 billion to $31 billion over that period. But in 2021, LDCs’ current account deficit rose to $51 billion and, in 2022, to $64 billion. The trade deficit also increased, surpassing $100 billion in both years.
A greater relative current account deficit, accounting for 4.9 per cent of GDPgross domestic product in 2022, distinguishes LDCsleast developed countries from other developing economies, which, as a group, ran a surplus of 1.7 per cent of GDPgross domestic product. In 2022, as a group, the small island developing States (SIDSsmall island developing States) recorded a surplus of almost 11 per cent of their collective GDPgross domestic product. Yet, excluding Singapore, the group would have had a negative balance, with 14 SIDSsmall island developing States recording a deficit of 10 per cent of GDPgross domestic product, or more, and some SIDSsmall island developing States faced deficits close to, or over, 30 per cent of GDPgross domestic product.
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
References
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