{
  "title": "Current Account Imbalances in AsEAN Countries: Are they a Problem?",
  "publication": "IMF Working Papers, April 1, 1997",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/current-account-imbalances-in-asean-countries-are-they-a-problem-2173",
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  "summary": "Applying a consumption-smoothing model to five ASEAN countries reveals that excessive private consumption has not tended to characterize their widening external imbalances in recent years, except to a small degree in Indonesia and Malaysia.",
  "sections": [
    {
      "heading": "Summary / Principal Finding",
      "content": "- Applying a consumption-smoothing model to five ASEAN countries reveals that excessive private consumption has not tended to characterize their widening external imbalances in recent years, except to a small degree in Indonesia and Malaysia.\n- Even when the current account deficit appears sustainable, there is a case to reduce them in order to lower the risks arising from other factors."
    },
    {
      "heading": "Factors Influencing Desirability of Large External Deficits",
      "content": "- Level and composition of external liabilities.\n- Flexibility of macroeconomic policies.\n- Health of banking systems.\n- Implication: beyond consumption-smoothing behavior, these factors affect whether large current account deficits are problematic."
    },
    {
      "heading": "Policy Implications and Recommendations",
      "content": "- Assess current account deficits not only for consumption-smoothing motives but also for vulnerabilities stemming from external liability structures, macro policy flexibility, and banking-system health.\n- Where deficits are sustainable but vulnerabilities are present, consider policies to reduce deficits to lower associated risks.\n\n---\n\n Content in this bundle\n\n- Current Account Imbalances in AAEAN Countries: Are They a Problem? - WP/97/51\n  - Current Account Imbalances in AAEAN Countries: Are They a Problem? - WP/97/51 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Current Account Imbalances in AAEAN Countries: Are They a Problem? - WP/97/51 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/current-account-imbalances-in-asean-countries-are-they-a-problem-2173"
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    "[Markdown version](/en/publications/wp/issues/2016/12/30/current-account-imbalances-in-asean-countries-are-they-a-problem-2173/index.md)",
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    "Authors: Jonathan David Ostry",
    "Published: April 1, 1997",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451847079.001",
    "Applying a consumption-smoothing model to five ASEAN countries reveals that excessive private consumption has not tended to characterize their widening external imbalances in recent years, except to a small degree in Indonesia and Malaysia.",
    "Even when the current account deficit appears sustainable, there is a case to reduce them in order to lower the risks arising from other factors.",
    "Level and composition of external liabilities.",
    "Flexibility of macroeconomic policies.",
    "Health of banking systems.",
    "Implication: beyond consumption-smoothing behavior, these factors affect whether large current account deficits are problematic.",
    "Assess current account deficits not only for consumption-smoothing motives but also for vulnerabilities stemming from external liability structures, macro policy flexibility, and banking-system health.",
    "Where deficits are sustainable but vulnerabilities are present, consider policies to reduce deficits to lower associated risks.",
    "**Current Account Imbalances in AAEAN Countries: Are They a Problem? - WP/97/51**"
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