Balance of Payments

The Balance of Payments, is often quoted to indicate the level of international trade between the two countries. It is comprised of the Current Account and the Capital Account.

The Balance of Payments is an economic data series relating to international trade. The series is calculated by summarising all transactions that a country’s individuals, companies and government entities make over a set time period, with another country. The Balance of Payments includes both the Current Account and the Capital Account. The Current Account is calculated by summarising the net trade in goods and services, plus net earnings on cross-border investments plus the net transfer payments.

The Capital Account accounts for a country’s transactions in financial instruments and central bank reserves, with another country. The Balance of Payments summaries all transactions that a country or an economic block, for example, the EU makes with either a country, such as Canada or another economic block or even the rest of the world. The Balance of Payments is mostly reported as the Quarterly Balance of Payments.