Balance of Payments (BOP)

Set of accounts that record a country’s international transactions, and which always balance out with no surplus or deficit shown on the overall basis.

A surplus or deficit can be shown in any of its three component account :

1. Current Account, covers export and import of goods and services,

 

2. Capital Account, covers investment inflows and outflows, and

 

3. Gold Account, covers Gold Inflow and Outflow.

 

BOP accounting serves to highlight a country’s competitive strength and weaknesses, and helps in achieving balanced economic growth.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s