What is external savings?

External savings refer to capital or financial resources that a country or entity receives from foreign sources, typically in the form of investments, loans, or remittances. These funds can be used to finance domestic projects, stimulate economic growth, or support balance of payments. External savings are crucial for countries with limited domestic savings, allowing them to invest in infrastructure, education, and other development needs. However, reliance on external savings can also lead to vulnerabilities, such as increased debt or dependence on foreign investors.