11.1.1—Balance of payments accounts

The balance of payments records transactions between residents and the rest of the world. The current account covers goods, services, primary income and current transfers; the financial account records investment and other financial flows.

Exports and receipts are credits, while imports and payments are debits. In principle the accounts balance once financing and reserve changes are included, but measurement errors and timing create a statistical discrepancy.

A current-account deficit may be matched by net capital inflows or a fall in reserves. That financing identity does not say whether the position is healthy or sustainable.

The balance of payments is not only the trade balance, and “it balances” does not mean every account is zero.