IMF Working Papers

Are African Current Account Deficits Different? Stylized Facts, Transitory Shocks, and Decomposition Analysis

By Luisa Zanforlin, César Calderón, Alberto Chong

January 1, 2001

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Luisa Zanforlin, César Calderón, and Alberto Chong. Are African Current Account Deficits Different? Stylized Facts, Transitory Shocks, and Decomposition Analysis, (USA: International Monetary Fund, 2001) accessed December 7, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper analyzes the behavior of current account deficits in Africa and estimates whether the deficits are excessive with respect to fundamentals. The findings are the deficits are (i) not very persistent; (ii) positively linked with domestic growth; (iii) strongly linked with public (and private) savings, suggesting that fiscal consolidation in IMF-supported programs may be relatively effective; (iv) linked with aid flows, so as to close the external gap, and (v) linked with currency depreciation and the terms of trade. The deficit is "excessive," as it is almost 3 percent of the gross national disposable income above the equilibrium level.

Subject: Balance of payments, Current account, Current account balance, Current account deficits, International trade, National accounts, Private savings, Terms of trade

Keywords: Africa, Behavior of the current account deficit, Cent. Afr. rep, Country sample, Current Account, Current account adjustment, Current account balance, Current account behavior, Current account deficit, Current account deficits, Current account determination, Current account effect, Current account fluctuation, Current account reversal, Current account sustainability, Decomposition Analysis, Dynamic Panel Data Models, Long-run current account deficit, North Africa, Private savings, Rate of growth, Sub-Saharan Africa, Such current account deficit, Terms of trade, WP

Publication Details

  • Pages:

    40

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2001/004

  • Stock No:

    WPIEA0042001

  • ISBN:

    9781451842043

  • ISSN:

    1018-5941