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What is current account deficit?

January 5, 2011


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A country has a current account deficit when it borrows from other countries more than they lend to it. Deficit occurs when the amount of imports and transfers is greater than the amount of exports and transfers. Current account deficit includes the amount of trade deficit and interest payments on monies the country borrows from foreigners to finance the trade deficit. Both government and private payments are included in the calculation

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