Question

The following economic transactions are drawn from a country's balance of payments for the 2016 in US dollars billions.
i) Export of civilians goods.                             224.4
ii) imports of civilian goods                             368.7
iii) military sales abroad                                         8.9
iv) military purchase abroad                                     12.6
v) exports of service (investment income & fees earned, foreign tourism)                                         139.5
vi) import services (investment income paid out) 117.2
vii) Net unilateral transfers (gifts)                            15.7
viii) foreign private investments in home country 202.7
ix) Home country investments overseas        94.4
x) Foreign official lending in home country   34.7
xi) Home country lending overseas             1.9
xii) Net in home country official reserve   0.30

You are required to categorise the above transactions as either credit or debit in balance of payments account.

Develop the following:
1.Trade balance
2.Current account balance
3. Capital account balance
4. Official reserves balance
5. Indicate whether surplus/deficits balance in all the account balances.

Answer 1

Summary:

The given question intends to test the knowledge of a student in the field of macro economics and the basic financial/economic calculations that are made to get the financial position of a country in a particular period, it deals with the net inflows and outflows of funds and capital between the country and the rest of the world. All the calculations made are presented in ($billion). Further figures written in brackets represents negative amounts in that account/section.

Thank you.