asked the Minister for Finance if he agrees with the recent forecast by the Central Bank that the current balance of payments deficit will reach £1,200 million in 1981; if not, why; the figure he envisages; the basis of the calculation; and how he envisages the deficit being financed.
Written Answers. - Balance of Payments Deficit.
55.
Any forecast for the deficit on the current account of the balance of payments can only be tentative at this early stage in the year. The deficit is the net result of considerably larger gross flows, especially on external trade. The prospects for these items are subject to some uncertainties, notably the timing and extent of the expected recovery in world economic activity and its effects on world trade. Nonetheless, I would not dispute the possibility that the balance of payments deficit this year could be of the order of magnitude forecast by the Central Bank. The deficit will be financed through capital flows which will include foreign borrowing and EEC capital transfers.