... other economies to meet its domestic consumption and investment requirements. Comparison of Australia's current account deficit with another OECD country Australia has traditionally run a current account deficit, as investment opportunities have exceeded domestic saving. The deficit has been quite volatile, reflecting cyclical influences on saving and investment. Changes in income stemming from swings in the terms of trade have mainly affected the level of saving as spending habits have been maintained. The level of the current account deficit increased in the early 1980s and has averaged 4.75% of GDP since then (Appendix: Figure 1). While there has been no obvious trend in the level of the current account deficit over the past decade and a half, there have been fluctuations around the average with significant upswings in the mid-1980s, late 1980s. By OECD standards Australia has an average saving rate, relatively high investment rate and a large current account deficit. The ...

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