Balance of Payment

(Deficit & Surplus)

By : Mahi, Sarah and Yash
 Exports and Imports
● Balance Payments include the statistics of businesses exports and imports
○ The country the business is situated in is heavily affected (GDP rises/ falls)
Exports - Are goods and services sold from one country to another
● They bring money (foreign currencies) into a country
Imports - Are goods and services bought in by one country from other countries
● Goods are bought in from other countries
● They are also bought with forign currency and this leads to money flowing out
 Balance of Payment Deficit
A balance of payment deficit in a country can arise if said country imports more capital,
goods, and services than it exports

You can see the Balance of payment deficit by

Current account + capital account receipts < current account + capital account payments
 Balance of Payment Surplus
Balance of payments surplus occurs when a country's total exports are higher than its
imports. This helps to generate capital to fund its domestic products. With a surplus in its BoP,
a country can also lend funds outside its borders.

It occurs when
Current account + capital account receipts > capital account + capital account payments

A surplus in BoP can help to boost the short term economic growth in a country