Balance of Payments
The balance of payments provides us with important information about whether or not a country is “paying its way” in the international economy.
What is the Balance of Payments?
· records all of the many financial transactions that are made between consumers, businesses and the government in the UK with people across the rest of the World.
· tell us about how much is being spent by British consumers and firms on imported goods and services
· how successful UK firms have been in exporting to other countries and markets. Why is the export sector of the economy vital for the UK?
Trade in goods includes items such as:
Semi-finished goods and components
(i) Durable goods e.g. DVD recorder and new cars
(ii) Non-durable goods e.g. foods and beverages
Capital goods (e.g. new plant and equipment)
Trade in services includes:
Banking, insurance and consultancy services
Other financial services including foreign exchange and derivatives trading
Transport and shipping
Education and health services
Services associated with research and development
Trade in goods
· includes exports and imports of oil and other energy products
· manufactured goods, foodstuffs, raw materials and components.
· exporting and importing of tangible products
Trade in services