How Is the Current Account Related to National Saving?(cont. CA SP +S9-I =SP government deficit -I Government deficit is negative government saving equal to G-T A high government deficit causes a negative current account balance when other factors remain constant. Copyright 2012 Pearson Education.All rights reserved. 13-16Copyright © 2012 Pearson Education. All rights reserved. 13-16 How Is the Current Account Related to National Saving? (cont.) CA = Sp + Sg – I = Sp – government deficit – I • Government deficit is negative government saving – equal to G – T • A high government deficit causes a negative current account balance when other factors remain constant