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.
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However, as the gains of the homegrown reform program became clearly demonstrated and the foreign exchange resources granted by the real economy flourished, Egypt's external balances and various economic indicators have gained considerable strength since November 2016.
Tracking the progress on external balances and mitigating vulnerabilities, the report mentions that 'Imprudent economic policies have contributed to a surge in imports and a wider current account deficit' in Pakistan, adding that 'significant dependence on oil imports leaves countries' like Pakistan 'vulnerable to further rises in global fuel prices.'
The agency said that India's ratings balance a strong medium-term growth outlook and favourable external balances against a weak fiscal position and difficult business environment.
A World Bank analysis in November 2017 revealed a weaker Pakistani rupee would help external balances with limited economic costs.
The external balances have seen the largest transformation.
The decline in oil prices adversely affected Bahrain's fiscal and external balances. GDP growth slowed to an estimated 3.2 per cent in 2015 from 4.5 percent in 2014.
Preliminary data of the State of Kuwait's BOP of 2015 show a decline in the surpluses of the external balances. The Current Account (reflecting the outcome of transactions between domestic economy and other economies encompassing goods, services, Primary Income "investment income", and Secondary Income "current transfers") realised a surplus of KD 1797 million (3.9 per cent of nominal 2014 GDP) during 2015 against KD 15479 million during 2014 (33.2 per cent of nominal 2014 GDP).
Consequently, for most GCC sovereigns, fiscal and external breakeven oil prices - the oil price level required to achieve at least fiscal and external balances - have "risen sharply" over the past few years, the rating agency noted.
Qatar's programme will aim for medium-term real economic growth, despite contribution to "a deterioration in fiscal and external balances, exacerbated by large fall in oil prices", S&P continued.
Consequently, we have revised our forecasts for Kazakhstan's economic growth and fiscal and external balances," said the S&P.
The international rating agency said the revised outlook for Jordan's rating was supported by expectations that the Kingdom's fiscal and external balances will continue to improve.

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