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Working Paper 90 - Current Account Situation in South Africa: Issues to Consider

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The current account deficit in South Africa deteriorated from 0.1 percent of GDP in 2000 to 6.4 percent in 2006 and averaging 6.7 percent in the first half of 2007. Recently, there has been a growing concern of the ballooning deficit which warrants some discussion on its causes and sustainability to avoid any current account reversal. The general message of this paper is that the current account situation in South Africa does not seem to be a major concern because it is more than financed by capital inflows at the back of strong macroeconomic fundamentals. However, the paper underscores that it is important to remain conscious of its magnitude and to monitor the risks associated with running a current account deficit of this nature.

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  • Tonia Kandiero, 2007. "Working Paper 90 - Current Account Situation in South Africa: Issues to Consider," Working Paper Series 225, African Development Bank.
    • Handle: RePEc:adb:adbwps:225
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    1. Sebastian Edwards, 2002. "Does the Current Account Matter?," NBER Chapters, in: Preventing Currency Crises in Emerging Markets, pages 21-76, National Bureau of Economic Research, Inc.
    2. Gian Maria Milesi-Ferretti & Assaf Razin, 1996. "Sustainability of Persistent Current Account Deficits," NBER Working Papers 5467, National Bureau of Economic Research, Inc.
    3. Milesi-Ferretti, G-M & Razin, A, 1996. "Current-Account Sustainability," Princeton Studies in International Economics 81, International Economics Section, Departement of Economics Princeton University,.
    4. Jeffrey D. Sachs, 1981. "The Current Account and macroeconomic Adjustment in the 1970s," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 12(1), pages 201-282.
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