Reading guide: IMF External Sector Report (2026)What is a report on lopsided flows of money between countries?
On July 30, 2026 the IMF published the 2026 External Sector Report, Amid Rising Imbalances, the Case for Rebalancing. Based on 2025 data, it provides the external assessment of 30 of the world's largest economies. It reports that global current account balances widened further in 2025 and that excess balances increased.
- ○Applies: It assesses 30 of the world's largest economies (2025 data)
- ○Applies: Global current account balances widened further in 2025
- ○Applies: Simultaneous action by countries on domestic imbalances gives the best outcome
Key points
- Global current account balances widened further in 2025
- Staff assessment indicates that excess current account balances have increased, with China and the United States as the main drivers
- Simultaneous policy actions by countries to address domestic imbalances yield the most favorable outcome for the global economy; rebalancing by one country alone can still meaningfully reduce excess global balances, but could pose risks for financial markets and growth
What to do in practice
- When current account or imbalances appear in the news, remember that it is about the gaps between countries in the flow of money from trade and investment
The gap between the money flowing into and out of a country through trade and investment with other countries is called the current account balance. Every year the IMF assesses whether this gap has become too lopsided for 30 of the world's large economies. The 2026 report says the gaps widened further in 2025.
- (1)The world's current account gaps widen
- (2)Large, lasting gaps raise the risk of a sudden adjustment
- (3)Countries acting together on their domestic imbalances gives the best outcome
Points
- The world's current account gaps widened further in 2025
- The main drivers of the greater imbalance were China and the United States
- If countries act on their domestic imbalances at the same time, the outcome is the best for the world
What the words mean
- current account balance
- the gap between the money coming into and going out of a country through trade in goods and services, income from abroad and so on
The report provides the external assessment of 30 of the world's largest economies based on the 2025 data. Global current account balances widened further in 2025. Simultaneous policy actions to address domestic imbalances yield the most favorable outcome for the global economy.
- International Monetary Fund (IMF): IMF, 2026 External Sector Report: Amid Rising Imbalances, the Case for Rebalancing
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