As a first approximation the CAD can be thought of as giving Australia's exports less imports. Exports of goods and services enter with a positive value and imports of goods and services are deducted. In addition to exports and imports, incomes received from abroad minus incomes paid abroad are included as are other current transfers, items such as pensions received by Australian residents. The current account is financed by capital inflows, including borrowing from overseas.
Overseas borrowings increase the foreign debt.
Hence there is a fairly close link between the CAD and Australia's foreign debt. The CAD is once again an issue in Australia. Recent figures suggest a large widening in the CAD that is once again the subject of public attention. Some private forecasts are higher. There has also been discussion from time to time about the sustainability of our foreign debt.