At the individual country level, various internal imbalances were also accumulating, such as financial imbalances, increased fiscal deficits, and widening gaps in output between the service and the manufacturing sectors. From the global perspective, the external imbalances seem to have narrowed somewhat recently.
This is due to the sluggishness of demand in the deficit countries, rather than to any improved competitiveness in their export sectors or to expansions in domestic demand in the surplus countries. From the individual country perspective, however, internal imbalances continue to exist, and in some cases have even worsened.