3.1.1. Balance of Current Account

♤ It includes the BoT (visibles), the balance of invisibles (services or transfer payments).

♤ It is a measure of all payments made for currently produced goods and services plus non- trade flows of funds between a country and rest of the world.

o Non-trade flows comprise Factor Income from abroad (interest, profits, wages, etc.) and international transfer payments.

o Invisible Balance shows the value of imports and exports of services or invisible items.

Balance of Current Account = Balance of Trade + Balance of Invisibles + Balance of Transfers BoT = Export of goods – Import of goods