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Are African Current Account Deficits Different? Stylized Facts, Transitory Shocks, and Decomposition Analysis
Author:
Ms. Luisa Zanforlin
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Mr. César Calderón null

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Mr. Alberto Chong null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2001: Issue 004
Language:
English
Publication Date:
01 Jan 2001
DOI:
https://doi.org/10.5089/9781451842043.001
ISBN:
9781451842043
ISSN:
1018-5941
Pages:
40
Keywords:
WP; current account deficit; current account effect; current account behavior; current account reversal; current account determination; Current Account; Dynamic Panel Data Models; Decomposition Analysis; country sample; long-run current account deficit; current account adjustment; rate of growth; behavior of the current account deficit; such current account deficit; current account sustainability; Cent. Afr. rep; current account fluctuation; Current account deficits; Private savings; Terms of trade; Current account balance; Africa; Sub-Saharan Africa; North Africa
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper analyzes the behavior of current account deficits in Africa and estimates whether the deficits are excessive with respect to fundamentals. The findings are the deficits are (i) not very persistent; (ii) positively linked with domestic growth; (iii) strongly linked with public (and private) savings, suggesting that fiscal consolidation in IMF-supported programs may be relatively effective; (iv) linked with aid flows, so as to close the external gap, and (v) linked with currency depreciation and the terms of trade. The deficit is "excessive," as it is almost 3 percent of the gross national disposable income above the equilibrium level.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund