6.3.1—Current account components

The current account of the balance of payments records trade in goods and services, primary income such as wages and investment income, and current transfers such as remittances or aid.

Goods and services are often separated because a country can run a surplus in one and a deficit in the other. Primary income reflects payments for factors owned across borders; transfers have no direct exchange of a good or service.

A country may export machinery, import tourism services, receive dividends from overseas assets and send remittances abroad. Each belongs to a different current-account component.

The current account is not just the visible trade balance, and a transfer is not automatically a capital-flow item.