Current Account Definition

The current account is an important indicator about an economy’s health. It pertains to the sum in the balance of trade, net income coming from abroad and net current transfers. A positive current account balance indicates that the united states is a net lender to all of those other world, while a negative current account balance indicates that it must be a net borrower from all of those other world. A current account surplus increases a nation’s net overseas assets by the quantity of the surplus, and a current account deficit decreases it simply by that amount.