Friday, May 07, 2004

Last month I stumbled across FT columnist Martin Wolf's helpful concept of the 'Anglosphere big spenders' whose inordinate consumption and debt loads keep the wheels of the global economy turning. Their overconsumption soaks up (for now) the overproduction of the rest of the world. Wolf isn't just pulling this out of his hat, of course. IMF data tell an interesting story.

In 2003, three members of the Anglosphere -- the United States, the United Kingdom and Australia -- ran the three largest current account deficits in the world, a combined US$615bn. The UK deficit was 2.4% of GDP; in the US, 4.9%; and in Australia, a whopping 6.0% of GDP. Canada, the fourth member of the Anglosphere, actually ran a current account surplus of US$18.4bn (2.1% of GDP), but all of that was thanks to the Big Vacuum to the South. Without running a goods trade surplus with the United States of 7.6% of GDP (!), we would see that Canada does its share of Anglosphere net consumption, too.

The top overproducers/creditors? Japan (US$136.4bn), Germany (US$57.5bn) and China/Hong Kong (US$47.0bn).


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