EM in Focus The IMF’s External Sector Report — Global Imbalances Continue to Rise

Economics Research 11 August 2026 | 11:32AM BST

The IMF’s External Sector Report — Global Imbalances Continue to Rise

n The IMF’s 2026 External Sector Report provides a rich set of updated external Kevin Daly | indicators across 30 Emerging Market (EM) and Developed Market (DM) Goldman Sachs International

economies, highlighting several important developments in global external balances. n Global external imbalances – measured as the absolute sum of current account surpluses and deficits – widened from +3.6% to +3.7% of global GDP between 2024 and 2025, driven by higher surpluses in Asia (most notably, China) alongside higher deficits in Turkiye, Canada and the UK. The US deficit saw a modest decline in 2025, from -4.0% to -3.6% of GDP (or from -1.1% to -0.9% of global GDP). According to our forecasts and the IMF’s projections, a further moderate widening of global imbalances is likely in the coming years. n Despite the widening of current accounts (the flow of external balances), there was a slight narrowing in net international investment positions (NIIPs, the stock of accumulated external balances) – implying that positive valuation effects offset part of the impact of higher current account imbalances. Measured as a share of GDP, most of the largest imbalances – in both stocks and flows – remain concentrated in DM rather than EM economies, although China’s current account surplus is the world’s largest in absolute terms. n The pattern of widening external balances is replicated in the IMF’s assessment of external balances. The current account balances and real exchange rates of almost half the economies in the report have moved further away from the level implied by economic ‘fundamentals’. n Given the size and persistence of global external imbalances, and the further widening expected in 2026, the IMF calls for coordinated policy action across surplus and deficit economies to support external rebalancing. n Our own analysis of external balances is broadly consistent with these themes, and with the IMF’s assessment. We have found the current account balances of Mainland China, Korea, Taiwan and most DM creditors (Singapore, Sweden, the Netherlands, Germany, and Japan) screen as ‘too positive’ under both frameworks, while the balances of the US, UK, Turkiye and Brazil screen as ‘too negative’.

Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to

The IMF’s External Sector Report — Global Imbalances Continue to Rise

The IMF recently released the 2026 edition of its External Sector Report, its annual analysis and overview of the external balances of DM and EM economies. This year’s report focuses on the continued widening of global current account imbalances in 2025, and calls for coordinated policy action across surplus and deficit economies to support external rebalancing. The report’s aggregate data cover the period through the end of 2025, with key trends and statistics for 30 major EM and DM economies also provided for 2026.1

Current Account Imbalances Continue to Rise Global external imbalances – measured as the absolute sum of current account surpluses and deficits – widened from +3.6% to +3.7% of global GDP between 2024 and 2025. This continues the rising trend observed since the COVID-19 pandemic, and visibly reverses the pattern of declines that prevailed between the Global Financial Crisis and the pandemic.

The widening in 2025 was predominantly driven by a $300bn increase in China’s current account surplus (equivalent to almost 0.25% of world GDP, and marking the largest current account widening in absolute terms over the past 25 years). While other economies have larger surpluses as a share of GDP, China’s current account surplus is the world’s largest in absolute terms and also may be understated in the official data.2 The large increase in Mainland China’s surplus – alongside larger surpluses in Taiwan, Japan, and Korea3 – collectively raised the absolute global external balance, despite narrower surpluses in the Euro area and among oil exporters (reflecting lower oil prices…