Balance of Payments

Ms. Stuti Jain

Symbiosis Law School, Noida

S
Meaning- Balance of Payments
Statement of monetary &
economic Transactions
Transaction by individuals,
made between a country
companies & government
and rest of the world
within a defined period

Zero in perfect scenario

Indicator of BoP
A BoP surplus indicates
that a country’s exports
are more than its
imports.

A BoP deficit indicates

that a country’s imports
are more than exports
 Components of BoP

Current Account

BoP Components Capital Account

Financial Account
 Current Account
Revenue
from
tourism

Transportation
receipts

Flow of funds from Revenue form

goods and services specialised
trade (import and services
export) between
countries Royalties
from
patents
 Capital Account
Purchase or
disposal of
non- financial
assets

Money
received
from debt-
forgiveness

Flow
Flow of of
taxes
international
capital transactions Purchase or sale of
FA by migrants
moving out in a
different country
Financial Account

Flow of funds related to

investments

Government owned assets

Foreign investments

Assets held abroad by nationals

Record of assets by foreign

nationals
 Importance of BoP

 Financial & economic status

 Country’s currency appreciating or depreciating

 Fiscal & trade Policies

 Economic Dealings of country with other countries

Thank You