Nevertheless, and in spite of persistent challenges, much of the macroeconomic adjustment has now taken place. Looking back, 2013 was certainly the year of the turnaround. Since 2008, the current account deficits of stressed countries have narrowed substantially. Greece, Spain and Portugal moved from double-digit deficits and in 2013 achieved slight current account surpluses.
Over the same period, the current account balance of Ireland went from a deficit of around 5% of GDP to a surplus of around 5% of GDP. Some of the adjustment certainly reflects a decline in imports due to the cyclical compression of domestic demand. But in Spain, Portugal and Ireland, the larger part of the adjustment is attributable to robust export performance.