Current Account Deficit (CAD)
When a nation imports more goods, services, and capital transfers than it exports to foreign trade partners.
Detailed Definition
A Current Account Deficit means a country is a net debtor to the rest of the world. In developing economies like Pakistan, persistent CAD depletes foreign exchange reserves, requiring foreign loans (such as from the IMF or bilateral partners) and putting downward pressure on the national currency.
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Related in Macroeconomics
Currency Devaluation
A deliberate or market-driven downward adjustment in the exchange value of a national currency.
Deflation
A sustained decline in the general price level of goods and services, increasing the purchasing power of money.
Inflation (CPI)
The rate at which the general level of prices for goods and services is rising over time.