Framework for Sustainability of the Current Account

• To develop a framework for sustainability analysis of the current account we write the balance of payments relation as:

• Exports – Energy Imports – Non-Energy Imports -Interest Payments on Foreign Debt + EU Grants + FDI inflows + Change in Foreign Debt = 0

• The sum of the first four items denote the current account balance, and the sum of the last three items the financial account balance.

• All items are measured in terms of foreign currency (US Dollars)