Balance of Payments terminology

balance of payments (definition)

a comprehensive and systematic record of all transactions between one country e.g. South Africa and all other countries of the world for a specific period of time, for example one year

current account

the balance of payments section that reflects international daily transactions in terms of production, income and expenditure

merchandise exports

the rand value of goods exported

net gold exports

the overall difference between money received for exporting gold and money paid for importing gold

services receipts

money earned/received by South African companies for the transportation of goods and passengers between countries, travel, construction services, financial and insurance services, various business, professional and technical services, as well as personal, cultural and recreational services and government services

income receipts

income earned by South African residents in the rest of the world

composition of income receipts

Compensation of employees includes wages, salaries and other benefits earned by individuals from countries other than those in which they are resident (i.e.) from the rest of the world. Investment income includes dividends, interest, profits and other forms of income earned from the provision of financial capital

merchandise imports

the rand value of imported goods

payments for services

money paid by South African companies for the transportation of goods and passengers between countries, travel, construction services, financial and insurance services, various business, professional and technical services, as well as personal, cultural and recreational services and government service

income payments

income earned by non-residents in South Africa. It includes wages, salaries and other benefits earned by individuals who are not residents of South Africa. It also includes dividends, interest, profits and other forms of income earned by non-residents from the provision of financial capital

current transfers

money, goods or services transferred without anything tangible being received in return such as includes social security contributions and benefits, taxes imposed by government, immigrant and other remittances and donations

balance on the current account

can be indicated as a deficit (shortage) (-)

or surplus (+)

trade balance

merchandise exports + net gold exports - merchandise imports

capital transfer account

international transactions in terms of ownership of fixed assets

financial account

the balance of payments section that records international transactions in assets and liabilities

direct investment

investment in fixed property or the acquisition of a significant (10 % or more) share in a business

net portfolio investment

purchases of assets such as shares or bonds where the investor is interested only in the expected financial return on the investment

derivative

a financial contract that gets its value, risk, and basic term structure from an underlying asset

other investment

a residual category which includes all financial transactions not included direct investment, derivatives investment or portfolio investment

reserve assets

foreign currency liabilities of the Reserve Bank with non-resident institutions and loans from the IMF are included in the calculation of reserve assets

balance on financial account

the net value of the transfers of non-monetary and fixed assets. A deficit (negative value) indicates a net outflow of funds, while a surplus (positive value) indicates a net inflow of funds.

unrecorded transactions

an amount that takes into account errors and omissions to ensure that the balance of payments actually balances