2. BALANCE OF PAYMENT
Balance of payments (BOP) accounts are an
accounting record of all monetary transactions
between a country and the rest of the world.
It is mainly difference between import and
export of country.
3.
4. SURPLUS AND DEFICIT
ITEMS
Sources of funds for a nation, such as exports
or the receipts of loans and investments, are
recorded as positive or surplus items.
Uses of funds, such as for imports or to invest
in foreign countries, are recorded as negative
or deficit items.
5.
6. USES OF BOP
ACCOUNTS
Weakness of country and strength as partner
in international trade.
Reveals the changes in the composition and
magnitude of foreign trade.
Indication of future repercussion of country’s
past trade performance .
8. TYPES OF ACCOUNT UNDER
BOP
They are composed of the following:
The Current Account
The Capital Account
The Official Reserves Account
Statistical Discrepancy
9. TYPES OF ACCOUNTS OF BOP
A. Current Account
A. Net exports/imports goods&services (Balance of Trade)
9
B. Net Income (investment income from direct portfolio investment plus
employee compensation
C. Net transfers (sums sent home by migrant abroad)
B. Capital Account
Capital transfers related to purchase and sale of fixed assets such as real estate
C. Financial Account
A. Net foreign direct investment
B. Net portfolio investment Basic Balance = A+B+C
C. Other financial items
D. Net Errors and Omissions Overall Balance = A+B+C+D
Missing data such as illegal transfers
E. Reserves and Related Items
Changes in official monetary reserves including gold and foreign exchange reserves
Σ (A:E) = Overall Balance
10. CAUSES OR KINDS OF BOP
DISEQUILIBRUM
Cyclical disequilibrium
Secular /long term disequilibrium
Technological disequilibrium
Structural disequilibrium