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The new external sector report of the IMF shows large current account imbalances, with advanced economies — in particular the euro area and Germany — contributing the most.
1/4 #in @IMFNews
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1/4 #in @IMFNews
imf.org/~/media/Files/…
The biggest contributor to rising global imbalances in advanced economies is the shift towards corporate net savings - requiring structural reforms, raising competition and reducing market power — and high wealth inequality - calling for a rebalancing in tax systems. 2/4 #in
Germany is the biggest contributor to global imbalances, with a current account surplus of US$ 291 billion in 2018 (or 7.3% of GDP), most of which (~5% of GDP) the IMF judges to be excessive - highlighting Germany’s sizable lack of private and public investment. #in 3/4
German investors would have been much better off investing part of the sizable surplus within Germany as they have incurred large losses on their foreign investments over the past 20 years (and on average losses by 2% in 2011-2017).
4/4 #in
4/4 #in
