Answer to Question #212161 in Macroeconomics for Catherine Melita

Question

Discuss in the context of any one of the South Pacific Island countries the following: Use data analysis and or graphs where applicable.

1. What are three major categories of transactions in the current account (CA)?
2. Analyze CA data for the country over the last 5 years (2015-2019) – what are the trends and their macroeconomic implications?
3. What is the link between current account balance (CA) and Net International Investment Position (NIIP)?
4. Calculate Net International Investment Position (NIIP) as percentage of GDP for the Country - what does it indicate?

Obtain data on Balance of Payments, Current Account and Net International Investment Position. Data can be obtained from many sources – country’s government statistical department or data.imf.org > data sets> International Financial Statistics. Quarterly review of Reserve Banks/Central Banks can also be used. For better analysis, get quarterly data if possible. 

Answer 1

1:

Fiji is the largest country in south African pacific island and its three major categories of transactions in the current account include goods and services, income and current transfers.

2:

the following is the value of current account yearly

in 2019 the value was-0.7, 2018 it was -0.5, 2017it was -0.41 ,in 2016 the value was-02and in 2015 it was -0.2.

The value is increasing meaning the economy isnt at a better place.

3:

The current account balanceand Net International Investment Position determines the country economic net worth.

4:

$=\frac{2.2}{1.8}=2\%$

The net economy is weak.