The 23 economies on New America's 2011 Current Account Surplus Watch had surpluses of $1.4 trillion in 2010 and will run an estimated $1.6 trillion surplus in 2011.  The countries on the list, which include such prominent economies as China, Germany and Saudi Arabia, consistently rely on demand from abroad instead of taking measures to grow their domestic market or help other economies expand through international development assistance.

Chronic surplus economies create a serious drag on global economic growth because they subtract demand out of the world economy at a time of weak global aggregate demand. Additionally, surplus economies complicate the efforts of deficit countries to rebalance their economies -- a challenge that is particularly apparent today in Europe.  International institutions and groupings like the International Monetary Fund and the G-20 have yet to find the appropriate mechanisms to adequately police chronic surplus economies.

The Current Account Surplus Watch is the first comprehensive index of economies with large current account surpluses that measures the negative impact of chronic surpluses on world economic growth.  The watch list takes into account the policies these economies pursue to offset their surpluses with fiscal expansion, exchange rate appreciation, and international development assistance.  It also makes an allowance for resource-based economies by noting their dependence on a declining resource base.

Findings of the 2011 Current Account Surplus Watch include:

• Surpluses in Germany, the Netherlands and Austria, perpetuate the imbalances that are at the heart of the European debt crisis.  Despite commitments to support peripheral Europe through the EFSF, these Surplus Watch economies have not taken sufficient steps to expand their own economies or to support the debt restructuring of debt-burdened European economies.

• Singapore, Malaysia, Kuwait and Qatar were the worst offenders on the 2011 Current Account Surplus Watch because of their large surpluses and the lack of policies to increase demand or to offset the negative effect of their surpluses.

• China, Japan and Germany, the second, third, and fourth largest economies in the world, all appear on the Surplus Watch, underscoring the problems created by the growing weight of current account surplus economies in the world economy. 

• China moved down from 5^th place to 6^th place on the 2011 Surplus Watch, owing to its lower current account surplus and the measures it took to increase domestic demand.

• Oil exporters, such as Saudi Arabia, Norway and Venezuela, increased their current account surpluses dramatically in 2010 and are likely to grow further in 2011, suggesting the need for a new international mechanism to recycle petro-dollar surpluses.  The IMF expects surpluses in these Resource Economies on the Surplus Watch to double from an estimated $350 billion in 2010 to $550 billion in 2011.

The full list, along with supporting data and an interactive map of the included economies, can be found at http://currentaccounts.newamerica.net.