BOP Table for a Hypothetical Country

The following table shows the BOP for a hypothetical country.

Item of the BoPNet Balance ($ billion)Comment
Current Account
(A) Balance of trade in goods-20There is a trade deficit in goods.
(B) Balance of trade in services+10There is a trade surplus in services.
(C) Net investment income-12Net outflow of income, i.e., due to profits of international corporations
(D) Net overseas transfers+8Net inflow of transfers, say, from remittances from non-resident citizens
Adding A+B+C+D = Current account balance-14Overall, the nation runs a current account deficit
Financial Account
Net balance of FDI flows+5Positive FDI net inflow
Net balance of portfolio investment flows+2Positive net inflow into equity markets, property etc.
Net balance of short term banking flows-2Small net outflow of currency from nation’s banking system
Balancing item+2There to reflect errors and omissions in data calculations
Changes to reserves of gold and foreign currency+7(Means that gold and foreign currency reserves have been reduced
Overall balance of payments0 

 

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