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Are current account surpluses always positive?

The current account surplus is Often considered a positive sign in the economy. However, in some cases, they are also negative indicators. For example, Japan’s current account surplus is due both to sluggish domestic demand and its export competitiveness.

Why is the current account surplus bad?

A current account surplus could lead to Domestic employment declines If: The surplus is caused by a recession that hits domestic demand and causes import spending to fall. In a global recession, exports fell and imports fell more sharply leading to surpluses.

Why is the current account deficit good?

The current account deficit is An important indicator of competitiveness and import and export levels. Large current account deficits usually imply some kind of imbalance in the economy that needs to be corrected through exchange rate depreciation and/or increased competitiveness over time.