Balance of payments deficit

A balance of payments deficit arises from foreign trade in the balance of payments when the monetary value of imports is higher than the monetary value of exports . The opposite is the balance of payments surplus .

General

Balances of payments are always formally balanced and can therefore show neither deficits nor surpluses. B. the purchase price of an exported car and its payment in foreign currency must match. However, both items are posted in different partial balances of the balance of payments. A balance (surplus or deficit) can only arise in the partial balance sheets because the corresponding counterpart is missing here. A balance of payments is according to the guidelines of the IMF from the main balance of current account (including the main balance of trade balance , services balance , income and assets balance sheet ), capital account and financial account (sub-accounts: foreign exchange account and capital account ) and a "Clearance": ${\ displaystyle ZB}$ ${\ displaystyle LB}$ ${\ displaystyle VB}$ ${\ displaystyle KB}$

{\ displaystyle ZB = LB + VB + KB}

.

While the export of the car appears in the trade balance, the foreign exchange income from the purchase price is reflected in the foreign exchange balance. This auto export leads to surpluses in the respective partial balances.

detection

When a “balance of payments balance” is used in the media as a neutral term for a balance of payments deficit or surplus, it usually refers to the balance of the current account (trade balance). This is positive when exports exceed imports (plus net asset transfers to foreigners) : ${\ displaystyle E}$ ${\ displaystyle I}$

{\ displaystyle E> I}

.

One then speaks of an active trade or payment balance because on the assets side, exports outweigh imports on the liabilities side .

statistics

In 2018 there were the following current account surpluses:

country	Current account surplus in billion US $ (2016)	Current account surplus in billion US $ (2018)	Current account surplus as% of GDP (2016)
Germany	264.09	294.3	7.6
Japan	40.3	174.1	0.8
Russia	66.2	114.9	5.2
Netherlands	83.04	89.92	10.8
South Korea	95.9	76.41	7.0
Switzerland	78.57	68.83	11.9
Taiwan	63.58	68.26	12.0
Saudi Arabia	3.18	65.16	0.5
Singapore	76.85	63.91	25.9
Italy	64.03	53.49	3.4
People's Republic of China	249.6	49.2	2.2
Thailand	59.95	37.67	14.7
Ireland	68.20	37.23	23.2
Norway	4.59	35.04	1.2
United Arab Emirates	8.31	28.03	2.2
Denmark	21.05	21.17	6.9

Germany achieved the highest current account surplus in 2018, followed by Japan and Russia. The USA (−574.21 billion US $), the United Kingdom (−49.72), France (−42.41), Canada (−36.19) and India (−33.00) had the highest current account deficits .

economic aspects

External deficits and surpluses affect the money supply by the so-called money supply effect , because for example, a balance of payments deficit in the affected State, the demand for money increased by foreign exchange outflows and thus reduced the money supply and vice versa.

Structural deficits or surpluses that are too high can be detrimental to an economy and are therefore combated by governments. Here, the available external trade policy different instruments at its disposal, and that trade barriers , currency restrictions , devaluations or free exchange rates (in the case of deficits). These instruments are reversible in the event of surpluses. The domestic trade policy must take accompanying measures in these cases.

External balance

The EU Commission assumes an external balance if the current account surplus or deficit does not exceed the threshold of 6% of gross domestic product (GDP) within 3 years . Only a few countries exceeded this threshold with regard to the current account surplus in 2017, namely Malta (+ 13.6%), the Netherlands (+ 10.5%), Switzerland (+ 9.8%), Ireland (+ 8.5%), Germany ( + 7.9%), Denmark (+ 7.6%) and Slovenia (+ 7.1%). Only the Netherlands, Switzerland, Germany and Denmark exceeded this threshold for 3 years. Turkey (- 5.6%), the United Kingdom (- 3.8%) and the USA (- 2.3%), among others, had a high current account deficit .

Individual evidence

↑ Statista The Statistics Portal: Ranking of the 20 countries with the largest current account surpluses in 2018 , 2019
↑ Torsten Bleich / Meik Friedrich / Werner A. Halver / Christof Röme / Michael Vorfeld, Volkswirtschaftslehre , 2016, p. 14
↑ Statistics portal of the Institut der deutschen Wirtschaft, Germany in figures: table balance of the current account - in percent of GDP , 2017

[1] Statista The Statistics Portal: Ranking of the 20 countries with the largest current account surpluses in 2018 , 2019

[2] Torsten Bleich / Meik Friedrich / Werner A. Halver / Christof Röme / Michael Vorfeld, Volkswirtschaftslehre , 2016, p. 14

[3] Statistics portal of the Institut der deutschen Wirtschaft, Germany in figures: table balance of the current account - in percent of GDP , 2017