Current Account
The part of the balance of payments covering trade in goods and services, plus income and transfers with…
In plain English
The part of the balance of payments covering trade in goods and services, plus income and transfers with the rest of the world.
The current account adds the trade balance to cross-border income (like interest and dividends) and transfers (like money sent home by workers abroad).
A deficit means a country is spending more abroad than it earns and must borrow or attract investment to make up the gap. Big, persistent deficits can leave a currency vulnerable when foreign money gets nervous.
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