Scenarios for the Sustainability of the Current Account

• Suppose first that FDI-to-GDP ratio, EU grants-to-GDP ratio and energy-to-GDP ratio stay constant at the values indicated above in the two tables under the base case.

• Sustainability can be achieved through increases in non-interest non-energy current account-to-GDP ratio.

• Here economic theory tells us that non-interest non-energy current account to GDP ratio can be increased by decreasing aggregate real domestic demand for goods and services.

• But decreasing the aggregate demand for goods and services requires that the country uses contractionary policies, which may not be easy to follow.