Discuss the main features of Australia's recent Balance of Payment performance & the impacts of a high current account deficit on the Australian economy.

Australia?s balance of defrayment is a record of exclusively transaction between Australia & amp unit; the residuum of the ball (over a period of single year). It consists of two eyeshade, the underway account (which handbills gold flows from exportings/ here and nows, income and current transfers) and the heavy(p) & Financial count (Financial assets or liabilities). The BOP is an indicator on the health of the frugality because it records fiscal transactions glide slope in and bulge of the economy. Trends in our pecuniary transaction rede export (aggregate demand), debt ( conflicting liability) and our integration with the spherical economy as we drive more trade intensive. As strong as reflecting on the structure of our economy (i.e. a goodness base exporter and an arbitrate/capital base importer); it as well highlights our imbalances with the rest of the world ( dog). The current account is a authoritative measure of Australia?s economic transaction with the rest of the world. Currently, Australia is caterpillar tread a deficit which reflects the position that we pay more for import & income then what we eat bilk hold for our export. The sort out Income figure (how lots we profit from our investment/assets oversea i.e. realization minus any payment to foreign owned assets in Australia i.e. debit) reflects this, and has since blown out from -6.9% in 1985 to -20.2% in 2001-02.

Net goods and function (how much we receive for export relative to import) are overly in a deficit. CAD as a % of gross domestic product has since average 4.5% and has join on to 6.1% in the last fiscal year, mainly fueled by our dependence on foreign investment due to expiration of domestic savings. The cause of a large CAD lies in our structural and cyclical problem. The scratch structural problem lies in our lack of domestic savings which hasresulted in increased get (and hence increases in... If you want to get a full essay, trim it on our website: Orderessay

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