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- 2018
While we've been looking elsewhere, our current account deficit got a lot smaller. FEBRUARY 24 2018 - 12:07AM
Ross Gittins
Current Account Deficit has got a lot smaller! (BOP section of the course)
*News came from IMF's latest country report on Aus http://www.imf.org/en/Publications/...ia-Selected-Issues-45632?cid=em-COM-123-36654
* current account deficit has been a lot smaller. It's expected to have been only 2 per cent in 2017
*Report suggests for CA slow down in domestic demand (consumption + investment down) then major trading partners
-> M from then weakened more then Ex to them
*CAD further reduced by lower net Y deficit 3 per cent of GDP (before GFC) to 1.5% due to lower i.r (int payment to foeign > interest payment to us)
*Capital Account Surplus
-> Households saved > proportion of Y since crisis
-> Companies have saved > through retaining profits then paying dividends, less investment
-> tight up int capital adequacy req in rec to crisis = force bank to inc savings through retaining more profirs
Source:
http://www.smh.com.au/business/comm...eficit-got-a-lot-smaller-20180223-h0wjck.html
Commentary:
Good article on BOP with explanations
Ross Gittins
Current Account Deficit has got a lot smaller! (BOP section of the course)
*News came from IMF's latest country report on Aus http://www.imf.org/en/Publications/...ia-Selected-Issues-45632?cid=em-COM-123-36654
* current account deficit has been a lot smaller. It's expected to have been only 2 per cent in 2017
*Report suggests for CA slow down in domestic demand (consumption + investment down) then major trading partners
-> M from then weakened more then Ex to them
*CAD further reduced by lower net Y deficit 3 per cent of GDP (before GFC) to 1.5% due to lower i.r (int payment to foeign > interest payment to us)
*Capital Account Surplus
-> Households saved > proportion of Y since crisis
-> Companies have saved > through retaining profits then paying dividends, less investment
-> tight up int capital adequacy req in rec to crisis = force bank to inc savings through retaining more profirs
Source:
http://www.smh.com.au/business/comm...eficit-got-a-lot-smaller-20180223-h0wjck.html
Commentary:
Good article on BOP with explanations