Balance of payments

This refers to the macroeconomic principle of matching total income from abroad with total expenditure on goods, services and investments repaid abroad.

A balance of payments occurs when combined receipts from selling goods and services abroad, and from the return on investments abroad, equals the combined expenditure on imports of goods and services, and investment income going abroad. In the UK ‘the Balance of Payments’ is also an official account of the country’s international transactions.

Balance of Payments is a term normally found in business economics and financial management.

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