A country will have an existing account deficit if it sends out more money than it brings in.

In other
words, the country imports more goods and services than exports. That leads to a net loss for the
country, initially, the standard economic calculation of GDP suggests that any current account deficit
would reduce GDP and make the country poorer. So why do not the local resident just better consume
their own products rather than buy products from other countries? They pay particular attention to
short term and visible impacts, but do not look up to the longer term or even almost unnoticeable
effects. Trade with foreigners is no different from trade with locals and is always beneficial to the overall
economy.

The main contributor to these flows of money is trade in goods and services, but there is more to the
current account than trade:

 Foreign aid has been or will be sent,

 Foreign Direct Investment,
 A pension or a salary that the resident receives,
 Remittances.

In particularly, current account may alternatively be defined as the gap between national savings and
investment. A current account deficit may thus indicate a low amount of national savings relative to
investment, a high level of investment, or both. A current account deficit may be natural for capital-poor
emerging nations that have more investment possibilities than they can afford to pursue due to low
domestic savings.

Furthermore, private money frequently flows from developing to industrialized economies in practically.
Current account deficits are common in advanced economies, such as the USA, but surpluses or near
surpluses occur more frequently in Developing and Emerging Market economies.

In the second quarter of 2021, the US current account deficit widened to USD 190.3 billion reflecting a
combined balance on trade in goods and services and income flows between U.S. residents and other
countries.
(U.S. Current Account Deficit Widens in Second Quarter 2021, 2021)

If the current account deficit reflects an increase in imports over exports, it could indicate a problem of
competitiveness, but if there is also excessive investment compared to savings, this may be indicative of
high productivity and growing economies. If the deficit shows a lack of savings rather than high
investment, it could be due to irresponsible fiscal policies or consumption imbalances. It's hardly worth
talking about deficits being good or bad when everything has pros and cons.