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BOPs - introduction

S:\triplea_resources\DP_topic_packs\economics\student_topic_packs\media_microeconomics\images\scale_1.jpgThe balance of payments accounts record the financial flows between a country and the rest of the world. These flows result from trade, international investments, international borrowing and loan repayments.

Overall, the balance of payments accounts will always balance, although there may be deficits or surpluses on the various sections within the overall accounts. If there is a deficit in the trade of goods and services recorded in the current account, this will then be paid for by an inflow of funds recorded in the financial account.

On the following pages, we consider the following topics in detail:

  • Current account
  • Capital account
  • Financial account