Question

3. The data in Figure 1-3 end in the year 2011 Find the IMF's World Economic Outlook Databases. (Hint: Try searching "world eco- nomic outlook databases.") Use this interac- tive tool to obtain the latest data on current accounts in U.S. dollars for all countries (actual data or IMF estimates). Which countries had the 10 largest deficits last year? Which coun- tries had the 10 largest surpluses last year?

Please solve this question and comment on factors that explain why some countries run surpluses and others run deficits.

Answer 1

Answer:

The top 10 countries with current account deficit in 2018:

Country	Units	Scale	2018
United States	U.S. dollars	Billions	-614.689
United Kingdom	U.S. dollars	Billions	-110.065
India	U.S. dollars	Billions	-66.642
Canada	U.S. dollars	Billions	-57.291
Turkey	U.S. dollars	Billions	-49.146
France	U.S. dollars	Billions	-39.066
Brazil	U.S. dollars	Billions	-33.471
Argentina	U.S. dollars	Billions	-31.881
Australia	U.S. dollars	Billions	-28.306
Mexico	U.S. dollars	Billions	-23.329

Similarly the top 10 countries with current account surplus in 2018:

Country	Units	Scale	2018
Germany	U.S. dollars	Billions	346.757
Japan	U.S. dollars	Billions	194.496
China	U.S. dollars	Billions	166.745
Korea	U.S. dollars	Billions	92.419
Netherlands	U.S. dollars	Billions	90.546
Taiwan Province of China	U.S. dollars	Billions	83.373
Russia	U.S. dollars	Billions	76.834
Switzerland	U.S. dollars	Billions	71.611
Singapore	U.S. dollars	Billions	66.09
Italy	U.S. dollars	Billions	56.142

Some countries experience deficit where as some countries experience surplus in the current account balance. Current account balance is the difference between the exports and imports it makes during the year. If the exports are more it is said to be in positive and if imports are more it is said to be in deficit. The various factors that would result in this surplus and deficit are as follows:

1. Country having surplus is having higher exports may be because of various natural resources or product availability in the said country
2. Country might have surplus due to the factor that domestic consumption is higher than the imports. The country basically depend less on imports and encourage domestic growth rather than imports
3. Country with deficit will have to import more due to lack of natural resources or products like India which imports gold and crude oil.
4. Exports would be relatively less in current account deficit countries which would affect the foreign exchange availability