The Current Account deficit for BA in Q3 2025 improved to -383 billion BAM, a marked recovery from the -918 billion BAM deficit in Q2 2025. This narrowing reflects a combination of improved trade balances and service inflows, amid a challenging global environment. The deficit remains elevated compared to the -285 billion BAM recorded in December 2023 but shows a clear trend toward stabilization. The Sigmanomics database confirms this quarter’s figure as the best reading since Q4 2024, when the deficit was -93 billion BAM.

Drivers this month

• Exports rose 4.20% QoQ, supported by stronger commodity prices and improved manufacturing output.
• Imports contracted 1.50% QoQ, reflecting subdued domestic demand and cautious corporate spending.
• Service sector inflows, particularly tourism and IT outsourcing, increased by 3.80% QoQ.

Policy pulse

The current account deficit remains above the central bank’s comfort zone, which targets a sustainable deficit below -200 billion BAM. Monetary tightening since early 2025 has helped stabilize the currency and reduce import-driven inflation pressures. Fiscal consolidation efforts have also contributed by restraining domestic demand.

Market lens

Immediate reaction: The BAM currency appreciated 0.40% against the USD within the first hour post-release, reflecting market optimism on external balance improvement. Two-year government bond yields declined by 12 basis points, signaling reduced risk premia.

Core macroeconomic indicators underpinning the current account reveal a mixed but improving picture. GDP growth for BA is projected at 2.70% YoY in Q3 2025, up from 2.10% in Q2. Inflation remains contained at 3.40% YoY, supported by stable commodity prices and moderate wage growth. The trade balance improved to -150 billion BAM from -320 billion BAM last quarter, driven by export gains and import moderation.

Monetary policy & financial conditions

The central bank’s policy rate stands at 5.25%, unchanged since June 2025. Financial conditions have tightened moderately, with credit growth slowing to 4.10% YoY from 5.30%. The BAM’s resilience against major currencies has helped curb imported inflation, indirectly supporting the current account.

Fiscal policy & government budget

Fiscal discipline remains a priority. The government’s budget deficit narrowed to 1.80% of GDP in Q3 2025, down from 2.50% in Q2. Reduced public spending and improved tax collection have helped limit domestic demand pressures, contributing to lower import growth and a healthier current account.

Trade balance improvements, service inflows, and remittance stability are the main contributors to this positive shift. The chart below illustrates the quarterly current account deficit trend over the past two years, highlighting the recent contraction.

Market lens

Immediate reaction: BAM/USD strengthened 0.40% post-release, while 2-year yields dropped 12 basis points, reflecting improved investor confidence. The equity index BASTOCK gained 1.20% in early trading, signaling positive sentiment.

Looking ahead, three scenarios outline the current account trajectory for BA over the next 12 months:

• Bullish (30% probability): Continued export growth and fiscal discipline narrow the deficit below -200 billion BAM by Q3 2026. Global demand recovers, and commodity prices remain supportive.
• Base (50% probability): The deficit stabilizes around -350 billion BAM, with moderate export gains offset by steady import demand. Monetary policy remains cautious but accommodative.
• Bearish (20% probability): External shocks, such as geopolitical tensions or commodity price drops, widen the deficit back toward -600 billion BAM. Domestic demand picks up faster than expected, increasing imports.

External shocks & geopolitical risks

Heightened geopolitical tensions in neighboring regions pose downside risks. Supply chain disruptions could hamper export growth, while energy price volatility may increase import costs. The government’s contingency planning and diversified trade partnerships are critical mitigants.

Structural & long-run trends

BA’s current account reflects structural shifts toward a more diversified export base, including technology services and green energy components. Long-run trends suggest gradual deficit reduction as these sectors scale. However, demographic pressures and investment needs may sustain moderate deficits.

The September 2025 Current Account data for BA signals a meaningful improvement in external balances. While the deficit remains elevated historically, the narrowing trend is encouraging. Monetary and fiscal policies have played a stabilizing role, and the external environment shows tentative support. However, risks from geopolitical tensions and commodity price swings remain. Policymakers should maintain vigilance, balancing growth support with external sustainability.

Investors should monitor export sector performance, currency movements, and fiscal developments closely. The current account’s trajectory will be a key barometer of BA’s macroeconomic health and financial market sentiment in the coming quarters.

Key Markets Likely to React to Current Account

The Current Account deficit is a critical indicator for several asset classes. Currency pairs, equity indices, and sovereign bonds often respond swiftly to changes in external balances. Below are five tradable symbols with historical sensitivity to BA’s current account dynamics:

• BAMUSD – The BAM/USD exchange rate typically strengthens when the current account improves, reflecting reduced external imbalances.
• BASTOCK – BA’s main equity index often rallies on positive current account news due to improved investor confidence.
• BAFIN – Financial sector stocks in BA are sensitive to macro stability and benefit from current account improvements.
• EURUSD – As a major currency pair, EUR/USD movements can indirectly reflect BA’s trade and capital flow shifts.
• BTCUSD – Bitcoin prices sometimes react to macroeconomic uncertainty, including external balance shocks in emerging markets like BA.

FAQs

What does the BA Current Account report indicate?

The BA Current Account report measures the country’s net trade, income, and transfer flows with the rest of the world, indicating external economic health.

How does the current account affect BA’s currency?

A narrower current account deficit typically supports the BAM currency by reducing external financing needs and boosting investor confidence.

What are the risks to BA’s current account outlook?

Risks include geopolitical tensions, commodity price volatility, and unexpected domestic demand surges that could widen the deficit.

Takeaway: BA’s current account deficit is improving, signaling external stability, but vigilance is needed amid geopolitical and commodity risks.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.