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A sustained current account surplus can be desirable, as higher export sales help to create jobs.
Standards of living
It might be thought that a current account surplus is always beneficial as it involves a country saving more than it is spending. It does, however, mean that the country’s residents are not enjoying as high a standard of living as possible. The high level of demand, combined with additions to the money supply, may generate inflationary pressure.
Those countries experiencing current account deficits may also put pressure on the country to change its policies in order to reduce its surplus.
Economics notes on
Impact of a current account surplus
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