The Journal of Accounting and Management, Vol 5, No 3 (2015)

Abstract

This paper elaborate on the difficulties and challenges of the selected Western Balkan countries (Albania, Kosovo, Macedonia, Bosnia and Herzegovina, Serbia, Montenegro) that all seems to have serious problems with regard to the sustainability of their current account. Given the lack of research in the area of the current account deficit, we decided to examine this topic and to use the international literature. The authors have used different methodologies to analyze the weight of the sustainability of the current account of a country's economy.

After providing some insights about main approaches used for analyzing the balance of payments in general, this paper focus on data related to the stance of the current account of selected countries and it tries to explain some of the factors that are driving of the current account deficit.

The paper claims that domestic production and increased volume of exports accompanied by stable flow of FDIs are the key elements of the framework for improving the current account of the balance of payments in this part of the world.