Balance of

Payments
GERMAN BALANCE OF PAYMENT
AUSTRALIAN BALANCE OF PAYMENT

Balance of Payments (BOP)

A statement of all transactions between
one country and the rest of the world
during a given period; a record of flow of
goods, service, and investments across
borders.
It is a type of measurement.

Usage of Balance of Payments

Government policy makers
Evaluate General competitiveness of
domestic industry
To set exchange rate or interest rate policies
/ goals
Many other purposes

Usage of Balance of Payments

Individual and businesses
Gauge the growth and health of specific
type of trade or financial transaction by
country and region of world against the
home country.

Examples of International
Economic Transaction counted
in BOP
Pakistan imports of Honda Automobile which were
manufactured in Japan.
A Pakistani based firm is hired to manage the labor services in
the Middle East.
A U.S. subsidiary of French firm pays profits (dividends) back to
the parent firm in Paris.
A foreign tourist purchases hand made items in Pakistan.
A U.S. Government provides grant financing of military
equipment for NATO.
A Pakistani dentist purchases a U.S. Treasury bill through an
investment broker.

Major Sub Accounts of BOP

Current Account
An account in the BOP statement that records the result of
transection involving merchandise, services and unilateral
transfer between countries.

Financial Account
An account in the BOP statement that records transactions
involving borrowing, lending and investing across borders.

Net Error and Omission Account

Make sure the balance of payments actually balances (to adjust
errors and statistical discrepancies)

Current Account
Current Account includes all the international economic
transactions with income or payment flows occurring within the
year, the current period.
Four categories
Goods Trade (Merchandising)
Service Trade (banks, airline, construction services)
Income
Income associated with investment that was made in the previous period (dividend)
Wages salary paid to non resident workers.

Current Transfers
Any transfer between countries that is one way, a gift, or a grant.
U.S. Government aid for the development of less developed nations.

The Structure of Current

Account

The Capital and Financial

Accounts
Measure all international economic transaction
of financial assets
The capital account
The capital account is made up of transfer of financial assets and the
acquisition and disposal of non-produced / nonfinancial assets.

The financial account

Direct Investment
Portfolio Investment
Financial derivatives
Other investment assets / liabilities

The Financial Account

Direct Investment
That is the net balance of capital dispersed out of
and into the domestic country for the purpose of
exerting control over assets.

Portfolio Investments
The net balance of capital that flows in and out of
the domestic country but doesnt reach the 10%
ownership threshold of direct investment. (e.g.
debt securities)

The Financial Account

Financial Derivatives
That are financial instruments that are linked to a
specific financial instruments, indicators, or
commoditythe instruments underlying assets.

Other Investments Assets / Liabilities

Various long term and short term credits, cross
border loans, currency deposits, bank deposits and
other account receivable and payable related to
cross border trade.

Types of Business Transaction

Real assets:
The exchange of goods and services
The exchange of good for other goods or services (barter)
Common types of payment, money.

Financial assets:
The exchange of financial claims ( stocks, bonds, loans) in
exchange for other financial claims or money.

German
Balance of
Payments
DEUTSCHE BUNDESBANK
MONTHLY REPORT
MARCH 2014

Germany: Map & Flag

Some Facts
Germany: Country in Europe.
Federal Republic of Germany, is a Federal
Parliamentary Republic in Western Central Europe
Capital: Berlin
Population: 80.63 million (2013) world bank
Official Language: German

Currency
Old national Currency Name : Deutschmark or
Mark

Now Germany is a member of European Union also

member of European Monetary Union adopted
Euro() as its currency in 1999 (2001).

Present Condition
Current account surplus of 206 billions in

2013

Year -0n- year rise of 7.5 billions

Reasons
Economic up turn in Germany
Net Capital export in 2013 were high (

250.5 billions)

German portfolio investment in other

countries

Germany BOP Account Analysis

Currentaccountbalance
Components:

Current Account

+12

Trade ingoods1
Servicesexcluding
travel
Travel

Income
Currenttransfers

+10

As a %age of GDP

+8

Overall

+6
+4
+2
0
2
4
6
Enlargedscale
ofwhich

+6
+5

Withthe
euro-area
countries

+4
+3
+2
+1
0
1
2
3

199900

05

10

2013

Underlying Trends
German economys current account surplus
International economics condition
Calmar mood in financial Market.

Year on- year Growth 7.5 billions

Underlying Trends
2012 growth (+ 20 billions)
Reasons
Euro are Sovereign debt crisis 2009
Euro are uncertainly and strong position of Germany
Demands of German Goods
Increased export

Underlying Trends
2013 increase in import
Reasons
Postponed investment projects due to euro-area debt
crisis
Overall improvement in economy of the world
lessened the demand or Germans goods.
Import increased
But impact of overall price decrease of commodities

Underlying Trends
Income
Increasingly sizeable surplus
linked to expansion in net external assets
Reporting year is significant
German enterprises in the international
transport and logistic business and as providers
of IT services and technical and financial
services are also in demand outside of Germany

Germanys foreign trade within

and outside the Euro Area

bi

llion

Goods
700

To
To

600

exports
euro - area
non - euro countries

countries
area

500
400
300
200
100
0
600

Goods

imports
500
400
300
200
100
0

120

Enlarged

scale

Foreign

trade

balance

90
6 0
30
0
2007

2008

2009

2010

2011

2012

2013

Foreign Trade By Regions

Exports
Volume of goods delivered to the euro area contracted
Export to non euro area market recorded increase only
for a few countries during 2013
While 2011 & 2012 recorded very high rate of growth
Export to Ireland expanded
Demand for German goods decreased in 2 large
countries (France & Italy)

Foreign Trade By Regions

Exports
Export jump, pharmaceutical products
Germans expending industries intermediate
goods for central and east European countries
Higher sale were recorded in particular, for
computer electronic and optical products and
electrical equipment.

Foreign trade by selected

categories of goods in 2013
Significant Differences

Foreigntradebyselectedcategoriesofgoodsin2013

Exports
Agriculturalgoods
Unclassifiablegoods
1.0%
Energy2.8% 2.7%
Intermediate
goods
31.5%
Consumer
goods
17.2%

ofwhich
Motor
vehicles
17.5%

Imports
Agriculturalgoods
3.4%

Unclassifiablegoods
2.2%

Energy14.8%

Intermediate
goods
30.4%

Capital Goods
Motor Vehicles

Consumergoods
20.2%

Capitalgoods
44.7%

Energy

ofwhich
Motorvehicles
9.4%

Source ofunadjustedfigures:FederalStatisticalOffice.Deviationsfrom100%duetorounding.
DeutscheBundesbank

Capitalgoods
29.1%

Note able difference

Agricultural goods

Foreign Trade by Region

Percentage
share
Country/
roup of countries

2013

Per cent age

share

Annual percentage
change
2011

2012

Country/
group of countries

Other EU countries

36.8
20.2

8.4
13.3

3.4
3.3

1.0
2.0

6.9

11.8

11.8

9.9

15.5

0.1

4.3

14.9

2.2

3.3

30.8

10.6

USA

8.1

12.5

17.9

Japan

China

3.3

1.6

0.0

1.6

15.8

1.1

3.1

4.8

18.0

4.3

10.5

15.9

1.4

United Kingdom

15.0

13.4

3.3

1.3

5.2
1.6
0.1

3.0
6.1

8.8
20.6

4.5
2.9

Switzerland

4.1

13.8

2.1

4.0

28.4

4.6

USA

5.7

7.3

5.2

Japan

2.8

5.0

7.1

11.0

3.0

4.5

6.0

3.8

9.7

2.9

1.3

6.6

3.1

13.8

0.5

1.2

42.8

28.5

7.0

100.0

13.2

0.4

1.1

2.2
0.4

5.4

Russia

Newly industrialised
economies in Asia2
China

1.1
5.5
5.0

South and east Asian

emerging market
economies3
2.3

OPEC

12.7

18.2

1.5

South and east Asian

emerging market
economies3

All countries

37.7

Central and
east European
EU countries (8)1

Russia

Newly industrialised
economies in Asia2

Euro area (17)

Other EU countries
of which

Central and
east European
EU countries (8)1
Switzerland

2011

Imports

of which
United Kingdom

201 2

2013

2013

2013

Exports
Euro area (17)

Annual percentage
change

12.3

11.7

2.8

2.0

18.3

100.0

11.5

3.3

6.2
3.5
0.2

OPEC
All countries

1.2

1 Bulgaria, Croatia, Czech Republic, Hungary, Latvia, Lithuania,

Poland, Romania. 2 Hong Kong, Singapore, South Korea, Taiwan.
3 India, Indonesia, Malaysia, Philippines, Thailand, Vietnam.
Deutsche Bundesbank

Major Items of the Balance of

Payment
2011 r

Item

2012 r

2013 r

I Current account

Item
Balance on current
account

+ 178.4

+ 198.6

+ 206.0

1 Foreign trade1
Exports (fob)

1,061.2

1,095.8

1,093.8

902.5

905.9

896.2

+ 158.7

+ 189.8

+ 197.7

Imports (cif)
Balance
Supplementary trade
items2

2 Ser vices (balance)

of which
Travel (balance)

3 Income (balance)

0.6

0.0

1.8

III Financial account 4

20.3

33.2

29.0

1 Direct investment

15.6

51.7

23.2

2 Portfolio investment

+ 28.0

64.7

165.0

3 Financial derivatives

27.7

16.3

16.1

4 Other investment5

156.5

88.7

45.5

3.4

3.3

2.4

33.8

33.6

33.6

+ 70.5

+ 76.4

+ 76.9
5 Change in the reserve
assets at transaction
values (increase: )6

of which
Investment income
(balance)
+ 68.7
4 Current transfers
(balance)

II Balance of capital
transfers3

33.9

+ 73.8

37.7

+ 74.8

Balance on financial
account

2.8

1.3

0.8

174.7

222.7

250.6

+ 24.1

+ 42.8

-42..0
IV Errors and omissions

4.3

1 Special trade according to the official foreign trade statistics

(source: Federal Statistical Office). 2 Including warehouse transactions for the account of residents and the deduction of go ods
returned. 3 Including the acquisition/disposal of nonproduced
non-financial assets. 4 Net capital exports: . For details see the
table Financial transactions on p 45. 5 Includes financial and
trade credits, bank deposits and other assets. 6 Excludi ng alloca tion of SDRs and excluding changes due to value adjustments.

Australia
Balance of
Payments

Australia: Map & Flag

Some Facts
World 6th Largest Country By Area
Capital: Canberra
Currency: Australian Dollar ($)
Total Population: 23775400
52nd Most Populous Country

Current Account Balances (Sep

Qtr. 2014)

Goods and Services (Sep Qtr.

2014)

Net International Investment

Positon (Sep Qtr. 2014)

Balance on Current Account (Sep Qtr. 2014)

Current Account Balances (Dec

Qtr. 2014)

Goods and Services (Dec Qtr.

2014)

Net International Investment

Positon (Dec Qtr. 2014)

Balance on Current Account (Dec Qtr. 2014)

Analysis
Balance of Payments
In the December quarter 2014, the current
account deficit narrowed by 21.0 per cent from
$12.1B in the Septemberquarter 2014 to $9.6B in
the Decemberquarter2014 (Chart1).
Goods and Services
The net goods and services trade balance improved
from a trade deficit of $3.9B in September 2014 to a
trade deficit of $2.4B in December 2014 (Chart2).

Analysis
Income
The net income deficit narrowed from $8.2B in
the September quarter 2014 to $7.2B in the
December quarter 2014.

Australias Net Investment Position

In annual terms, the net investment position
increased by 3.4 per cent to $866.1B in the
December quarter 2014 (Chart3).

Analysis
Australias Balance of Payments
The net income deficit narrowed from $8.2B in
the September quarter 2014 to $7.2B in the
December quarter 2014.

Australias Net Investment Position

In original terms in 2014, Australia's balance of
payments deficit narrowed by 13.6 per cent
($7.0B) to $44.7B.

Australia's Current Account

Since 1959

Contribution of Goods And

Services

Historical Analysis of Balance of

Payment of Australia
In trade terms, the Australian
Economyhas had persistently large
current Account deficitsfor more
than 50 years.

Factors contributing to high C.A.

Deficit
Narrow export base
Lack of competitiveness
Having reliance on capital goods
from overseas
Low level of international saving
Lot of businesses seek funds
oversees

Effects of Current Account

Deficit
Low Investor Confidence
Possibilities of Currency crises and
central bank macro economic policies
Low Investment and low expenditure
restrain the current account from
growing.

Thank You.