Need help (1 Viewer)

[Bongo]

What are the factors that affect Australia's current account deficit?

Is it the structural and cyclical factors to do with BOGS and the primary account?

Any help will be greatly appreciated.

 

[KingTings]

Yea.
Since the BOGS and NPI is on the current account, any deficit in those categories leads to deficits in the whole Current Account. NPI is the main contributor.
Cyclical Factors affecting BOGS: Domestic/Global economic growth, exchange rate and terms of trade
Cyclical Factors affecting NPI: Interest repayments and the domestic business cycle.
Structural Factors affecting BOGS: Narrow export base and capacity constraints
Structural Factors affecting NPI: Mainly savings and investment gap.