Trends in current account surpluses and deficits are the reflection of longer-term trends in savings-investment activities which are strongly influenced by economic developments and demographics. Current account surpluses and deficits will only lead to problems when they become unsustainable, and thus a careful overall assessment is required.
Second, distinguishing between the structural and cyclical components of the Current account balance is often a difficult task. Trying to adjust the structural component through macroeconomic policy and exchange rate policy entails the risk of causing the development of financial imbalances which may destabilise the economy. A narrow policy focus on current accounts per se can be counter-productive.