A STUDY ON TRADE DEFICIT ANALYSIS

Abstract

A trade deficit occurs when a country's imports of goods and services exceed its exports over a specific period. Trade deficit analysis examines the causes, trends, and economic implications of this imbalance by evaluating factors such as domestic demand, exchange rates, inflation, production capacity, global market conditions, and government trade policies. While a moderate trade deficit can support economic growth by providing access to essential raw materials, technology, and capital goods, a persistent and widening deficit may lead to increased foreign debt, pressure on domestic industries, currency depreciation, and reduced employment opportunities. This study aims to analyze the pattern and determinants of the trade deficit, assess its impact on economic growth and external stability, and identify suitable policy measures to improve export competitiveness, promote domestic production, and achieve a more balanced and sustainable trade position.