The Effects of Current Account Deficits on Economic Growth: Evidence from Kenya

The study examines the effects of current account deficits on economic growth. It also evaluates the direction of causality between the current account deficits and economic growth. These have in the recent past been analyzed in developed and developing economies. In contributing to this ongoing debate, the study applied unit root tests, cointegration analysis, a dynamic vector error correction model and Toda-Yamamoto Granger-causality representation using annual time series data for Kenya from 1980 to 2016. There is evidence that in the long run, current account deficit has significant positive effect on economic growth in Kenya. The evidence suggests a bidirectional causality running from current account deficit to economic growth with feedback effects. The study underscores the need for the authorities to utilize current account deficits to strictly finance public investment to foster gross fixed capital formation, for shared prosperity in Kenya. The evidence underscores the need for more country specific studies in sub-Saharan Africa.

Boosting Indonesia’s Tourism Sector to be Competitive

Indonesia has many attractive tourist destinations, such as Borobudur Temple, Mount Bromo, Lake Toba, Raja Ampat, Labuan Bajo, and others. Indonesia’s tourism sector continues to be encouraged to become one of the major foreign exchange earner sectors and has a direct impact on the people involved in tourism activities in the hope of covering current account deficits, increasing employment, and moving Micro, Small and Medium Enterprises (MSMEs).

Farah Fadhilah Ansetti_130218278_KP B

Indonesia’s tourism sector continues to be encouraged to become one of the major foreign exchange earner sectors and has a direct impact on the people involved in tourism activities in the hope of covering current account deficits, increasing employment, and moving Micro, Small and Medium Enterprises (MSMEs). It should be understood that the tourism sector has direct and indirect impacts on the domestic economy

Timothy Davin S_130218181

Indonesia is a country who relies their income on state budget deficit and current asset deficit.This also has a positive impact on people who involved in tourism activities, in addition to earning income for themselves, people who involved in tourism activities also participate in overcoming economic problems by increasing business fields, reducing current account deficits, and other.

Ethiopia’s Tigray crisis puts privatisations at risk

Significance However, amid ongoing conflict in Tigray and considerable political uncertainty around the upcoming elections, the outcome may be disappointing. Impacts Despite improving FDI and some debt relief, forex reserves will likely remain depressed due to persistently high current account deficits. International aid suspended due to the Tigray conflict may not be released until the second half of the year. Economic recovery should become more noticeable from early 2022, but double-digit growth rates will remain a thing of the past.