external balance

(redirected from External Balances)

External Balance

A situation in which the money a country brings in from exports is roughly equal to the money it spends on imports. That is, external balance occurs when the current account is neither excessively positive nor excessively negative. An external balance implies capital movement. That is, a country needs to have both imports and exports to maintain an external balance; it is not sufficient simple to note no balance by not buying and selling goods. An external balance is considered sustainable. See also: Internal balance.

external balance

a situation of BALANCE OF PAYMENT EQUILIBRIUM that, over a number of years, results in a country spending and investing abroad no more than other countries spend and invest in it. The achievement of external balance is one of the macroeconomic objectives of the government. Compare INTERNAL BALANCE. See also DEMAND MANAGEMENT, EXCHANGE RATES, MACROECONOMIC POLICY, INTERNAL-EXTERNAL BALANCE MODEL.
References in periodicals archive ?
Ongoing political uncertainty in Egypt, and its impact on government finances and the country's external balances, will continue to influence banking-sector risks in the near term," the report concluded.
There will be some impact on the rupee, but not likely to be massive as this does not change the structural weakness of the Indian external balances," said Nizam Idris, head strategist for currency and fixed income at Macquarie Group.
But, if all countries simultaneously attempt to improve their fiscal or external balances by cutting spending and raising taxes, all will fail, because each country's austerity implies less demand for other countries' output, in turn perpetuating both domestic and external imbalances.
would lead to a slowdown in economic activity and the increasing pressure on the financial internal and external balances, "it added.
The second is workers' remittances, which act as an ever-increasing strain on external balances.
The Czech Republic's sovereign creditworthiness is supported by the country's macroeconomic resilience and policy flexibility, which is underpinned by a credible monetary policy regime, robust banking system, strong external balances and a moderate level of government indebtedness," said David Heslam, Director in Fitch's Sovereign group.
This, along with projected higher oil prices, should improve fiscal and external balances.
These are likely to include the sustainability of external balances and broader measures of the economy's performance and competitiveness.
However, emerging economies that rely on commodities for export revenues face the prospect of substantial deterioration in fiscal and external balances in the coming years.
Our governments and external balances are stronger than in other regions.
The prospects for the medium-term are for continued macroeconomic stability and manageable external balances.
That currency came under downward pressure in reaction to incoming data suggesting a somewhat-greater-than-expected falloff in demand following the recent increase in the consumption tax, but the release of the June current account surplus late in the intermeeting period rekindled market concerns about Japanese external balances and led to some appreciation of the yen.

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