An economy recorded the following international transactions during a financial year (all figures in millions of US dollars):
| Item | Value ($ million) |
|---|---|
| Merchandise Exports | 750 |
| Merchandise Imports | 920 |
| Net Receipts from Invisible Trade (Services) | +140 |
| Net Primary Income (Investment Income) | -30 |
| Net Secondary Income (Current Transfers) | +50 |
| Net Capital and Financial Account Inflows | +110 |
Based on the table above, what is the overall balance of payments surplus or deficit (in millions of US dollars) before official reserves adjustments?
Answer: 100 million USD
Answer
The overall balance of payments is a surplus of 100 million USD.
Subtracting merchandise imports ( 750M) gives a visible trade deficit of - 140M), net primary income (- 50M) yields a current account deficit of - 110M) produces an overall balance of payments surplus of $100 million.
Step-by-Step Solution
Key Concept
Calculation of Balance of Payments components and overall disequilibrium balance