Report
Current account balance and long-term capital inflows: Which countries are in difficulty?
We believe that a country is in difficulty when its current account deficit outweighs long-term capital inflows from non-residents (bonds, equities, direct investment). If a country is in this situation, it must either repatriate capital invested in the rest of the world, or take up short-term foreign debt. We examine which countries, among the United States, the United Kingdom, Germany, France, Spain, Italy and Japan, are in this dangerous situation. Among the countries analysed and in the recent period, we find that the current account deficit outweighs long-term capital inflows in the United Kingdom. In Japan, capital outflows exceed the current account surplus.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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