Trade Imbalances

Trade imbalances occur when a country imports more goods and services than it exports (a trade deficit) or exports more than it imports (a trade surplus). A deficit means money flows out of the country to buy foreign products, which can impact the country's economy, currency value, and employment. Conversely, a surplus indicates more foreign money coming in. These imbalances reflect differences in economic competitiveness, savings, investment, and consumer preferences. While some imbalances are normal in global trade, persistent deficits or surpluses can raise concerns about economic health and long-term sustainability.