engleski

The Deficit of Current Account Balances and Budgetary Deficit in Countries in Transition

During the last decade of this century the countries in transition (CIT) have undergone numerous changes in the field of the entire political, economic and social life. In restructuring process of their own economies, countries in transition deal with many common problems. In the analyzed period from 1993 to 1996 there was improvement in the economic situation in the countries in transition which is reflected on the higher rates of increase in GDP, increase in GDP per capita, as well as on the decrease in inflation and unemployment, which gives evidence of the efficiency of the transition process. One of the problems that transition brought to those countries is deficit in current account, as well as budget deficit. Deficits represent limit to a healthy and fast economic development and progress. Balance in balance of payments, as well as balanced budget are components of macroeconomic system. In the observed period there was deterioration in the balance of the current transactions in Croatia, Slovakia, Czech Republic, Slovenia and Romania, which is noticed in the emerging and an increase in deficit of the balance of current transactions, which is largely conditioned by high trade deficits of the examined countries. Because of this connection in work there have been done significant relations which explain the dependence of the trend of balance of the current transactions on the balance of foreign trade and on the trend of income transfers. From the analysis carried out in the examined four year period one can conclude that in most observed countries there was also an increase in the budgetary deficit, because most of the countries had deficit in the budget (estimate) in comparison with the beginning period. As the countries in transition have been in the upward phase of recovery, it is realistically to be expected that the budgetary deficits have to decrease in the following period. The authors gave an review of activities on deficits in countries in transition, and tried to create interdependence of activities of those two deficits.

deficit of current account balances; budgetary deficit; countries in transitions; interdependence of activities of those two deficits

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