Top 10 Countries And Territories With The Largest Surplus

Top 10 Countries And Territories With The Largest Surplus In Current Accounts

A current account is a sort of bank account that offers a substantially bigger number of transactions and services to businesses (such as check issuance, deposits, withdrawals, and D.D. issuing). Current account surpluses are positive current account balances that indicate a country’s exports exceed its purchases of goods and services. Current account surpluses may also indicate weak domestic demand or a drop in imports as a result of a recession.

●    Germany

Germany has the world’s greatest current account surplus of $290 billion in 2019. Germany’s current account surplus has been consistently large: from 2011 to 2020, it never fell below 6% of GDP and maintained above 7% for six years in a row (from 2014 to 2019, see Figure 1). As previously stated in 2018, such levels are exceedingly exceptional for a Western country. As a result, Germany’s foreign investment position (the gap between a country’s external financial assets and liabilities) has steadily expanded over the same time, reaching €2.1 trillion in the second quarter of 2021, or 61 percent of GDP. Germany’s current account surplus shrank to EUR 23.9 billion in December 2021, down from EUR 26.2 billion the previous month, as the goods surplus fell substantially to EUR 9.4 billion from EUR 14.5 billion. The services surplus fell slightly to EUR 2.8 billion from EUR 2.9 billion, but the primary income surplus increased to EUR 16.2 billion from EUR 14.6 billion the previous year. Finally, the secondary income shortfall shrank from EUR 5.9 billion to EUR 4.4 billion. In all, Germany’s current account surplus increased to EUR 247.4 billion in 2021, up from EUR 234.4 billion in 2020.

●    Japan

Japan’s current account surplus shrank 48.2 percent year on year in November to 897.3 billion ($7.8 billion), falling for the fourth month in a row as rising energy costs continued to weigh on the trade balance, according to the Finance Ministry on Wednesday. Imports increased 44.9 percent in value to $7.88 trillion, the biggest level since January 2014, with crude oil and liquefied natural gas cost more than tripling owing in part to the yen’s weakening, according to the statistics.

Exports increased by 23.2 percent to $7.45 trillion, marking the ninth consecutive month of growth, boosted by an 87.8 percent increase in steel exports and a 44.7 percent increase in semiconductor-manufacturing equipment sales. As a consequence, the country’s balance registered a 431.3 billion deficit in November, following a 166.7 billion surplus in October. Due to a surge in marine freight prices amid a worldwide shipping container scarcity, the service balance witnessed a deficit of 214.2 billion, up from a deficit of 575.4 billion the previous month. With just 20,700 foreign nationals visiting the country — down 63.5 percent from a year earlier due to the coronavirus epidemic — Japan eked out a travel surplus of $14.9 billion, down from $24.3 billion the previous year. The primary income, which reflects profits on overseas assets, generated a surplus of 1.79 trillion, up 14.3 percent over the previous year, thanks in part to larger dividend payments from domestic companies’ investments in the stocks of foreign shipping corporations.

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●    China

There are several reasons why the year 2020 will be remembered fondly. One that may not be evident to many is that China has returned to a level of macroeconomic surplus not seen in decades, and is likely to have hoovered up over 330 billion USD in the process. Although some cyclical factors played a role, the situation reminds us that trade barriers are ineffective in addressing such macroeconomic imbalances and that China still has a long way to go to rebalance its economy toward consumption and meet transparency standards for exchange rates and foreign exchange (FX) reserves.

In 2021, China had a current account surplus of $315.7 billion, or 1.80 percent of its GDP. The goods trade surplus was $554.5 billion, up 8% from the previous year, as both exports and imports grew steadily as the global economic recovery stayed on pace. The trade-in services, on the other hand, showed a deficit of $97.7 billion, a 33% decrease year on year. The travel sector’s deficit fell 15% to $99.3 billion as a result of the COVID-19 pandemic’s ongoing impact on cross-border tourism and study abroad.

●    Netherlands

In 2020, the Dutch current account balance of payments surplus was EUR 62 billion, or 7.8 percent of GDP (GDP). Despite a two-point decrease from 2019, the surplus remained higher than the European Commission’s 6-percentage-point target (see Figure 1). The drop was mostly caused by lower net income flows to and from other nations as a result of direct investment. The trade balance for the full year 2020 was unchanged from the previous year. In the third quarter of 2021, the Netherlands’ current account surplus climbed to EUR 19.068 billion, up from EUR 14.167 billion in the same period the previous year. The services surplus increased to EUR 5.496 billion, up from EUR 3.759 billion the previous year, while the primary income deficit decreased to EUR 0.585 billion, down from EUR 4.130 billion. Meanwhile, the goods surplus shrank to EUR 16.040 billion from EUR 16.673 billion, while the secondary income account went from a surplus of EUR 2.225 billion to a deficit of EUR 1.883 billion.

●    Switzerland

The Swiss National Bank reported a current account surplus of about 11 billion Swiss francs ($11.90 billion) in the second quarter, up 7 billion francs from the previous year. According to the central bank, the rise was mostly owing to a greater revenues surplus in the goods trade. Switzerland’s current account surplus was 26.6 USD billion in September 2021, up from 12.2 USD billion the previous quarter. Switzerland Current Account Balance: USD mn data is updated quarterly, with an average value of 6.3 USD bn accessible from March 1983 to September 2021.

●    Russia

According to early estimates, Russia’s current account surplus increased to USD 41.8 billion in the fourth quarter of 2021, up from USD 7 billion in the same time the previous year. It was the largest current account surplus since records began in 1994, with the goods surplus increasing to USD 63.4 billion from USD 25 billion the previous year, and exports increasing 57.2 percent to USD 148.7 billion, boosted by sales of oil (86.7 percent), oil products (74.5 percent), and natural gas (131.1 percent ). Imports, on the other hand, increased at a slower 22.4 percent rate to USD 85.3 billion. Meanwhile, the services deficit climbed to USD 7.4 billion in Q4 2020 from USD 5.2 billion, and the main income shortfall increased to USD 13 billion from USD 11.5 billion. The secondary income shortfall shrank modestly to USD 1.2 billion from 1.5 billion the previous year. Russia established a record current account surplus of USD 120.3 billion in 2021, as indicated by a twofold increase in trade balance surplus to USD 185.9 billion. According to early estimates from the Bank of Russia, the Russian Federation’s current account surplus of the balance of payments in January 2022 reached a record high of $19.0 billion, a rise of more than two times over January 2021.

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●    Taiwan

Taiwan’s current account surplus increased by USD 5.07 billion to USD 32.19 billion in Q4 2021, up from USD 27.13 billion the previous year. It was the greatest current-account surplus in history. The goods trade surplus increased by USD1.63 billion to USD 24.29 billion, owing mostly to stable expansion in global trade and economic activity, as well as persistent demand for digital transformation and developing technological applications. In addition, due to a rise in freight revenues, the services surplus increased by USD 2.35 billion to USD 3.95 billion.

Simultaneously, the primary income surplus increased by USD 1.01 billion to USD 4.64 billion as residents’ income from outward direct investment increased, while the secondary income deficit decreased by USD 0.08 billion to USD 0.68 billion, owing primarily to an increase in gift and sample receipts. Taiwan’s entire current account surplus increased from USD 94.96 billion in 2020 to USD 116.12 billion in 2021. According to the study, the country’s success in curbing the COVID-19 spread allowed local IT firms to profit from shifting orders, resulting in a spike in the low-contact economy. Shipping companies earned a total of US$19.2 billion, bringing the services account surplus to US$12.31 billion.

●    Singapore

Singapore’s current account surplus increased to SGD 25.72 billion in the fourth quarter of 2021, up from SGD 17.57 billion in the same time as the previous year, while the goods account surplus increased to SGD 43.08 billion, up from SGD 36.17 billion the previous year. Meanwhile, the primary income deficit fell to SGD 16.15 billion from SGD 18.86 billion, while the secondary income deficit fell to SGD 1.50 billion from SGD 1.94 billion. The services account surplus, on the other hand, shrank drastically to SGD 0.29 billion from SGD 2.20 billion the previous year.

●    North Korea

According to the central bank on Tuesday, South Korea maintained a current account surplus for the 18th consecutive month in October, although the surplus was lower than the previous month due to greater imports in the face of rising energy and raw material costs. The current account surplus in October was $6.95 billion, down from $10.07 billion the previous month, according to preliminary Bank of Korea estimates. Since May of last year, when the current account reversed a $3.33 billion deficit in April owing to weaker exports caused by the outbreak, the current account has been in the black for 18 months in a row. From January through October, the country’s current account balance was $77.07 billion.

The main income account, which records foreign worker wages and dividend payments, had a $670 million surplus in October, down from a $750 billion surplus a month earlier, owing in part to a rise in dividend payments. According to the statistics, the capital and financial account, which includes cross-border investments, had a net inflow of $7.01 billion in October, down from a net inflow of $9.78 billion in September.

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●    Italy

Italy’s current account surplus was 5.3 USD billion in November 2021, down from 6.1 USD billion the previous month. Italy Current Account Balance: USD mn data is provided monthly, from January 1970 to November 2021, with an average value of -50.3 USD million. The value of the data reached an all-time high of 12.0 USD billion in July 2020 and a record low of -11.7 USD billion in January 2011. Italy’s current account surplus shrank to EUR 4.399 billion in December 2021, down from EUR 7.500 billion the previous year.

The goods surplus fell from EUR 6.804 billion to EUR 1.845 billion, while the primary income surplus fell from EUR 3.714 billion to EUR 3.393 billion. In addition, the services gap increased to EUR 1.388 billion from EUR 0.459 billion, while the secondary income account shifted to a EUR 0.548 billion surplus from a EUR 2.560 billion deficit. In all, the current account surplus declined to EUR 58.180 billion from EUR 62.084 billion in 2021.

Bottom line

A current account surplus improves a country’s net assets in proportion to the size of the surplus. Because the trade balance has the greatest influence on the current account balance, countries with significant and persistent current account surpluses tend to be exporters of manufactured goods or energy.

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Dave P
Dave P
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