IMF said in its latest External Sector Report that overall current account surpluses and deficits reached 3 percent of world GDP in 2018. Around 35-40% of them are deemed excessive.
Higher-than-warranted balances remained centered in the euro area as a whole (driven by Germany and the Netherlands) and in other advanced economies (Korea, Singapore).
Lower-than-warranted balances remained concentrated in the United Kingdom, the United States, and some emerging market economies.
China’s external position, however, was assessed to be in line with fundamentals and desirable policies.
IMF also warned that “an intensification of trade tensions or a disorderly Brexit outcome—with further repercussions for global growth and risk aversion—could, however, affect other economies that are highly dependent on foreign demand and external financing.”
“Over the medium term, in absence of corrective policies, trade tensions could become entrenched, and further divergence of external stock positions could trigger costly disruptive adjustments in key debtor economies that could spill over to the rest of the world.