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Relationship between economic growth and balance of payments
With the increase of imports driven by economic growth, export products are facing the demand brought by the increase of national income. If imports grow faster than exports, it may lead to the deterioration of the trade balance. At the same time, in order to promote economic growth, we must increase investment. In the case of insufficient domestic capital sources, foreign capital inflows may cause capital account surplus. Although this can make up for the imbalance of international payments to a certain extent, it cannot guarantee the existence of economic growth and international balance of payments. On the contrary, when there is a deficit in the balance of payments, it is usually required to curb effective domestic demand to reduce imports and strive to eliminate the deficit, which may affect the domestic economic growth rate and lead to the consequences of economic recession. Therefore, it is difficult for economic growth and international payments to go hand in hand.