Balance of payments

The balance of payments is an accounting statement of the transactions of a country the rest of the world. The current account of the balance of payments is made up of the visible balance, consisting of exports minus imports, and the invisible balance consisting of income less expenditure for services (such as banking, insurance, shipping and tourism) plus profits and interest from abroad. The capital account of the balance of payments is the net financial inflow from incoming investments from overseas and outgoing overseas investment by domestic investors, together with the net inflow of international grants and loans. By definition, the sum of the current and capital account balances is zero.