Current Account
A measure of a country's trade in goods, services, income, and transfers with the rest of the world.
What is Current Account?
The current account is one of the two main components of a country's balance of payments (alongside the capital account). It records flows of goods (merchandise trade), services (tourism, finance, intellectual property), primary income (investment income, wages), and secondary income (remittances, foreign aid). A current account surplus means the country earns more from the rest of the world than it pays; a deficit means the opposite, financed by borrowing or selling assets. The US runs a persistent current account deficit; Germany and China consistently run surpluses.
Example
The US current account deficit was approximately $856 billion in 2022 (3.3% of GDP) — meaning the US consumed $856 billion more in goods, services, and income than it produced for the rest of the world.