The trade balance

Economic activity of each state in the international arena must be measured in some way in order to be able to make a specific rating or a list of the efficiency of a system in the country.One such indicator, which allows you to do is trade balance.It gives the opportunity to compare the trade performance of various countries, namely exports and imports.If the balance is positive, it means that the export import exceeds negative - reverse.

trade balance - is a clear correlation of import and export of purchased and sold goods and services for a certain period of time.This rate is also called the external trade balance of the country.It consists of actually paid transactions, and also includes goods and services purchased on credit.On this basis, they were divided into groups, which are divided in the country according to the final balance.The negative balance of trade is dominated by the import of goods into the territory of the state over their export and suggests that the country consumes more forei

gn goods.But this phenomenon has a positive side, namely the ability to contain inflation and support a high quality of life.Such an example can serve the United States and the United Kingdom.

trade balance can also be positive, indicating that the increased demand for domestic goods in the territory of the state, as well as in the international market.The positive balance of trade is dominated by goods and services exports over imports.About underdeveloped and uncompetitive economy can speak it a negative balance of foreign trade operations.In most cases, this situation leads to a devaluation of the national currency (devaluation), which happens as a result of the lack of ability to pay for import transactions.

export sector can be characterized as high-tech and capital-intensive, which in turn will attract a high enough volume of capital investment and resources, which are often expressed in the form of direct and portfolio investments.But despite this fact, the lack of a competitive and efficient economic system of the country are trying to cover the additional issue (issue) of securities, debentures, government bonds.The indicator of the trade balance is one of the few indicators that are not able to provide indirect and direct, the direct impact on the fluctuations of the national currency.This is explained as follows: the trade balance reflects the constant movement of financial resources between the partner countries related to the provision of certain goods and services under the contract.

worth noting the existence of a paradox, which is that the reaction rate of the national currency in the report on the trade balance is a minimum, and all because of the structural and technical reasons.That is a report characterized by a certain delay.The reason for this is the time required for its preparation and execution.Therefore, the dynamics of the course is very rarely reflects the true flow values ​​and material resources between the trading partners.

At the beginning of the analysis should pay attention to export, in fact it plays a crucial role in shaping the values ​​of growth in the economy.The experts then analyze the import, because it reflects primarily the demand for overseas products: goods and services.

trade balance - an indicator by which to compare the external economic activities of the countries and their internal structure.