. A strong local currency is helpful for
specialty retailers like the Gap on two levels. First, its
products will become relatively more price competitive.
Second, Gap would benefit from a strong Australian dollar
through translation gains, as profits are repatriated.
Others are wary that the removal of quotas and tariffs
will foster a fiscally unhealthy demand for imports. If
past performance is any indication, economic expansion
would most likely lead to a rise in the current account
deficit. Officials cite that if the president’s goal of 4 to 5
percent GDP growth is realized, the current account
deficit will increase from 3.75 to 4.25 percent of GDP
during the same period.