Global current account balances widened sharply in 2024, reversing a narrowing under way since the global financial crisis of 2008-2009, the International Monetary Fund said on Tuesday, warning that tariffs were not the answer.
...This year's report, based on 2024 data, showed the widening of global current account balances was due largely to increased excess balances in the world's three largest economies - the United States, China and the euro area.
The deficit in the United States widened by $228 billion to $1.13 trillion or 1% of global gross domestic product (GDP), while China's surplus increased by $161 billion to $424 billion and the euro surpluses expanded by $198 billion to $461 billion.
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"A major risk for the global economy is that countries will instead respond to rising imbalances by further raising trade barriers, leading to increased geoeconomic fragmentation. And while the impact on global imbalances will remain limited, the harm to the global economy will be long-lasting."