Australia’s current account deficit

Australia has been stuck in a current account deficit and this has been the country’s largest economic problem. Current account deficit is the country’s trade deficit and interest payments on what the country borrows from foreigners to finance the trade deficit. According to a recent article, “As high as $16 billion in the March quarter, Australia’s current account deficit shrank to $5.6 billion in the June quarter. That is just 1.7 per cent of gross domestic product, the third-lowest result in 30 years and the lowest in about 10 years.” Exports rose by 12 percent, showing that Australia is on the rising part of the J-curve, meaning that they are moving towards zero, then a current account surplus.

Click to view the recent article.