G7 Current Account Balance

Key observations

• Germany's surplus is the most persistent in the G7 — above 7% of GDP for most years since 2016. This reflects a structural savings-investment imbalance (high corporate savings, compressed domestic consumption) and has been a recurring flashpoint in EU economic policy debates.
• Japan runs a consistent surplus driven by investment income — Japanese companies and investors hold enormous overseas assets, generating large income flows even as the merchandise trade balance narrows.
• The US runs the world's largest current account deficit in absolute terms — a structural feature of the dollar's reserve currency status that allows it to finance consumption via capital inflows. The deficit widened sharply in 2022–23 despite Biden-era domestic-production incentives.
• The UK has run a persistent deficit since at least the 1980s, reflecting its services-dominant, low-savings economy. The deficit narrowed during COVID when imports collapsed, then re-widened.
• Italy's sharp swing from surplus to deficit in 2022 was driven by the gas price crisis — Italy imports most of its energy and the bill surged. It has since partially recovered as gas prices fell.
• Canada swung into rough balance in 2022 boosted by high oil prices (it is a major oil exporter). The surplus has since reversed as energy prices fell and import demand (partly from high immigration) rose.