Balance of payments/Addendum

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This addendum is a continuation of the article Balance of payments.

Definition

According to the IMF Balance of Payments Manual[1] the balance of payments is made up of transactions involving: goods, services and income; financial claims and liabilities; and gifts classified as transfers, and comprises two main groups of accounts:

  • a current account pertaining to goods and services, income, and current transfers; and
  • a capital and financial account pertaining to capital transfers and assets and financial assets and liabilities.

Policy implications

In principle the balance of payments can be influenced by four possible policy measures