Since mid 1980's, Australia has been experiencing persistently large current account deficits The current account deficit (CAD) represents the excess of debits in the current account in comparison to the credits; that is, the excess of money going out to imports and income payments to abroad in comparison to the money coming in from exports and income payments from abroad Each year Australia has been paying out considerably more for goods, services and other income/…showed first 75 words of 625 total…

…showed last 75 words of 625 total…goods have declined due to global trade shifting to more sophisticated manufactured goods and services, thus reducing the amount of fund inflows into Australia Int. competitiveness Structural change Paragraph three: Terms of trade Foreign liabilities + servicing costs National savings Paragraph four: Consequences of high CAD: - Growth of foreign liabilities - Servicing costs - Volatility of exchange rates - Constraint on future eco growth - More contractionary eco policy - Loss of financial investor confidence