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Does a government budget deficit necessarily cause a current account deficit?

Does a government budget deficit necessarily cause a current account deficit?
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Answer #1

Budget deficit concerns fiscal deficit where the government spendings are more compared to revenues. However current account deficit come sunder Balance of Payments which mostly involves a trade deficit. Fiscal deficit might concern more revenue due to exports but with high amounts of spendings on welfare activities it can increase. Unlikely, in BOP high imports can cause current account deficit which might not be accountable in the fiscal deficit. Therefore, it isn't necessary that a government budget deficit causes a fiscal deficit on the whole.

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