Deterioration in external financial position of countries

Much of the deterioration in the payments position has been due to the exceptionally severe and long recession and the rise of interest rates to unprecedented levels. Such deterioration not only reduces the availability of external savings and drains off domestically generated savings, in a number of countries it also adversely affects domestic savings performance.

1. Inadequate domestic savings
2. External debt crisis

1. Inadequate investment performance
2. External debt
3. Deteriorating terms of international financial loans to vulnerable countries

1. Social hardships of economic reform
2. Risk of capital investment
3. Limited availability of loans
4. Excessive anxiety on overseas lending
5. Decline in public sector savings
6. Burden of servicing foreign public debt

1. Speculative flight of capital
2. Net outflow of capital from countries
3. Inconsiderate choice of payment times by creditors
4. Excessive external trade deficits
5. Deterioration of international terms of trade
6. Decline in export credits

1. Position
2. Overpayment
3. Deterioration