It is an economic term that refers to the economic transactions carried out between the citizens of the country that elaborates it and the citizens of other countries. It is a very important document for experts who are dedicated to analyzing the macroeconomic behavior of a nation.
The balance of payment is an accounting record, where all the operations carried out by a country during a financial year (commonly one year of time) are expressed, complying with the principles of accounting.
In other words, the balance of payment shows us the operational behavior of a country with the rest of the world, that is, the international transactions carried out during its fiscal year.
These transactions include payments for the country's exports and imports, goods, services, financial transfers and financial capital.
Thus, exports or income generated through loans and investments are recorded in positive data. On the other hand, the use of funds to import or invest in foreign countries are recorded as negative data.
Consequently, if a country imports more than it exports, its balance of payments or trade will be in deficit (with a negative result). On the contrary, if the amount of money obtained by exports exceeds the amount that is being used to pay for imports or loans, the result will be a balance of payments surplus (with a positive result).
By including all the components of the balance of payments, the total of the sum of the positive and negative data must give zero, eliminating the possibility of a surplus or deficit, because precisely that is what the balance seeks, the balance of the nation, to avoid economic distortions.
Calculations are made in a single currency, commonly in the official currency of the country that performs the balance.
Nowadays, all the countries of the world function as “ open economies ”, this means that to a greater or lesser extent they have commercial and financial relations with other countries.
This link occurs through exports and imports of goods and services. In turn, this phenomenon shows the interdependence that can be generated between nations, where the disturbances that occur in the economic development of a country can affect the operation, production and employment levels of its trading partners.
