Trade & External
Current account deficit
A current account deficit occurs when a country imports more goods, services, and income than it exports over a period, meaning it must finance the gap by borrowing from or selling assets to foreigners. A deficit of 3% of GDP means the shortfall equals 3% of the country's total annual output.
Why it matters
Persistent, large deficits are a standard early-warning signal watched alongside foreign exchange reserves and debt-to-GDP.
Also known as: external deficit