Current Account

The current account of the balance of payments is the sum of the balance of trade (exports less imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). A current account surplus increases a country's net foreign assets by the corresponding amount, and a current account deficit does the reverse. Both government and private payments are included in the calculation.

The balance of trade is typically the most important part of the current account. This means that changes in the patterns of trade are key drivers of the current account. However, for the few countries with substantial overseas assets or liabilities, net factor payments may be significant.

The current account, capital account, financial account and change in official reserves together sum to zero as a result of accounting definitions.(dubious; discuss) This sum is known as the balance of payments. Typically, the change in official reserves is very small.

Action to reduce a substantial current account deficit usually involves increasing exports or decreasing imports. This may be accomplished directly through import restrictions, quotas, or duties (though these may indirectly limit exports as well), or subsidizing exports. Influencing the exchange rate to make exports cheaper for foreign buyers will indirectly affect the balance of payments. This can be accomplished by reducing domestic inflation (e.g. by cutting interest rates), loosening monetary policy (making more money available), or adjusting government spending to favor domestic suppliers.

Current Account

The current account of the balance of payments is the sum of the balance of trade (exports less imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). A current account surplus increases a country's net foreign assets by the corresponding amount, and a current account deficit does the reverse. Both government and private payments are included in the calculation.

The balance of trade is typically the most important part of the current account. This means that changes in the patterns of trade are key drivers of the current account. However, for the few countries with substantial overseas assets or liabilities, net factor payments may be significant.

The current account, capital account, financial account and change in official reserves together sum to zero as a result of accounting definitions.(dubious; discuss) This sum is known as the balance of payments. Typically, the change in official reserves is very small.

Action to reduce a substantial current account deficit usually involves increasing exports or decreasing imports. This may be accomplished directly through import restrictions, quotas, or duties (though these may indirectly limit exports as well), or subsidizing exports. Influencing the exchange rate to make exports cheaper for foreign buyers will indirectly affect the balance of payments. This can be accomplished by reducing domestic inflation (e.g. by cutting interest rates), loosening monetary policy (making more money available), or adjusting government spending to favor domestic suppliers.

Current Account

The current account of the balance of payments is the sum of the balance of trade (exports less imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). A current account surplus increases a country's net foreign assets by the corresponding amount, and a current account deficit does the reverse. Both government and private payments are included in the calculation.

The balance of trade is typically the most important part of the current account. This means that changes in the patterns of trade are key drivers of the current account. However, for the few countries with substantial overseas assets or liabilities, net factor payments may be significant.

The current account, capital account, financial account and change in official reserves together sum to zero as a result of accounting definitions.(dubious; discuss) This sum is known as the balance of payments. Typically, the change in official reserves is very small.

Action to reduce a substantial current account deficit usually involves increasing exports or decreasing imports. This may be accomplished directly through import restrictions, quotas, or duties (though these may indirectly limit exports as well), or subsidizing exports. Influencing the exchange rate to make exports cheaper for foreign buyers will indirectly affect the balance of payments. This can be accomplished by reducing domestic inflation (e.g. by cutting interest rates), loosening monetary policy (making more money available), or adjusting government spending to favor domestic suppliers.

Current Account

The current account of the balance of payments is the sum of the balance of trade (exports less imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). A current account surplus increases a country's net foreign assets by the corresponding amount, and a current account deficit does the reverse. Both government and private payments are included in the calculation.

The balance of trade is typically the most important part of the current account. This means that changes in the patterns of trade are key drivers of the current account. However, for the few countries with substantial overseas assets or liabilities, net factor payments may be significant.

The current account, capital account, financial account and change in official reserves together sum to zero as a result of accounting definitions.(dubious; discuss) This sum is known as the balance of payments. Typically, the change in official reserves is very small.

Action to reduce a substantial current account deficit usually involves increasing exports or decreasing imports. This may be accomplished directly through import restrictions, quotas, or duties (though these may indirectly limit exports as well), or subsidizing exports. Influencing the exchange rate to make exports cheaper for foreign buyers will indirectly affect the balance of payments. This can be accomplished by reducing domestic inflation (e.g. by cutting interest rates), loosening monetary policy (making more money available), or adjusting government spending to favor domestic suppliers.

Current Account

The current account of the balance of payments is the sum of the balance of trade (exports less imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). A current account surplus increases a country's net foreign assets by the corresponding amount, and a current account deficit does the reverse. Both government and private payments are included in the calculation.

The balance of trade is typically the most important part of the current account. This means that changes in the patterns of trade are key drivers of the current account. However, for the few countries with substantial overseas assets or liabilities, net factor payments may be significant.

The current account, capital account, financial account and change in official reserves together sum to zero as a result of accounting definitions.(dubious; discuss) This sum is known as the balance of payments. Typically, the change in official reserves is very small.

Action to reduce a substantial current account deficit usually involves increasing exports or decreasing imports. This may be accomplished directly through import restrictions, quotas, or duties (though these may indirectly limit exports as well), or subsidizing exports. Influencing the exchange rate to make exports cheaper for foreign buyers will indirectly affect the balance of payments. This can be accomplished by reducing domestic inflation (e.g. by cutting interest rates), loosening monetary policy (making more money available), or adjusting government spending to favor domestic suppliers.

Current Account

The current account of the balance of payments is the sum of the balance of trade (exports less imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). A current account surplus increases a country's net foreign assets by the corresponding amount, and a current account deficit does the reverse. Both government and private payments are included in the calculation.

The balance of trade is typically the most important part of the current account. This means that changes in the patterns of trade are key drivers of the current account. However, for the few countries with substantial overseas assets or liabilities, net factor payments may be significant.

The current account, capital account, financial account and change in official reserves together sum to zero as a result of accounting definitions.(dubious; discuss) This sum is known as the balance of payments. Typically, the change in official reserves is very small.

Action to reduce a substantial current account deficit usually involves increasing exports or decreasing imports. This may be accomplished directly through import restrictions, quotas, or duties (though these may indirectly limit exports as well), or subsidizing exports. Influencing the exchange rate to make exports cheaper for foreign buyers will indirectly affect the balance of payments. This can be accomplished by reducing domestic inflation (e.g. by cutting interest rates), loosening monetary policy (making more money available), or adjusting government spending to favor domestic suppliers.

Current Account

The current account of the balance of payments is the sum of the balance of trade (exports less imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). A current account surplus increases a country's net foreign assets by the corresponding amount, and a current account deficit does the reverse. Both government and private payments are included in the calculation.

The balance of trade is typically the most important part of the current account. This means that changes in the patterns of trade are key drivers of the current account. However, for the few countries with substantial overseas assets or liabilities, net factor payments may be significant.

The current account, capital account, financial account and change in official reserves together sum to zero as a result of accounting definitions.(dubious; discuss) This sum is known as the balance of payments. Typically, the change in official reserves is very small.

Action to reduce a substantial current account deficit usually involves increasing exports or decreasing imports. This may be accomplished directly through import restrictions, quotas, or duties (though these may indirectly limit exports as well), or subsidizing exports. Influencing the exchange rate to make exports cheaper for foreign buyers will indirectly affect the balance of payments. This can be accomplished by reducing domestic inflation (e.g. by cutting interest rates), loosening monetary policy (making more money available), or adjusting government spending to favor domestic suppliers.

Current Account

The current account of the balance of payments is the sum of the balance of trade (exports less imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). A current account surplus increases a country's net foreign assets by the corresponding amount, and a current account deficit does the reverse. Both government and private payments are included in the calculation.

The balance of trade is typically the most important part of the current account. This means that changes in the patterns of trade are key drivers of the current account. However, for the few countries with substantial overseas assets or liabilities, net factor payments may be significant.

The current account, capital account, financial account and change in official reserves together sum to zero as a result of accounting definitions.(dubious; discuss) This sum is known as the balance of payments. Typically, the change in official reserves is very small.

Action to reduce a substantial current account deficit usually involves increasing exports or decreasing imports. This may be accomplished directly through import restrictions, quotas, or duties (though these may indirectly limit exports as well), or subsidizing exports. Influencing the exchange rate to make exports cheaper for foreign buyers will indirectly affect the balance of payments. This can be accomplished by reducing domestic inflation (e.g. by cutting interest rates), loosening monetary policy (making more money available), or adjusting government spending to favor domestic suppliers.

Current Account

The current account of the balance of payments is the sum of the balance of trade (exports less imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). A current account surplus increases a country's net foreign assets by the corresponding amount, and a current account deficit does the reverse. Both government and private payments are included in the calculation.

The balance of trade is typically the most important part of the current account. This means that changes in the patterns of trade are key drivers of the current account. However, for the few countries with substantial overseas assets or liabilities, net factor payments may be significant.

The current account, capital account, financial account and change in official reserves together sum to zero as a result of accounting definitions.(dubious; discuss) This sum is known as the balance of payments. Typically, the change in official reserves is very small.

Action to reduce a substantial current account deficit usually involves increasing exports or decreasing imports. This may be accomplished directly through import restrictions, quotas, or duties (though these may indirectly limit exports as well), or subsidizing exports. Influencing the exchange rate to make exports cheaper for foreign buyers will indirectly affect the balance of payments. This can be accomplished by reducing domestic inflation (e.g. by cutting interest rates), loosening monetary policy (making more money available), or adjusting government spending to favor domestic suppliers.