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Group 11
*
*
*Introduction
*Definition of BoP
*Importance of BoP
*Composition of BoP
*
*The balance of payments (BOP) records
financial transactions made between consumers,
businesses and the government in one country
with others
*A record of all transactions made between one
particular country and all other countries
during a specified period of time.
*
*The Current Account
*The Capital and financial Account
*Official Settlements Account
*Errors and Omissions
*
*Income Growth
*External orientation
*Relationship between trade in goods and services
and direct investment flows
*Links between the exchange rate and the current
and financial accounts
*International banking transactions
*Assets securitization and financial market
developments
*External debt situation
*
*Trade – buying and selling of goods and services
*Exports – a credit entry
*Imports – a debit entry
* Trade balance – the sum of Exports and Imports
*Factor income – repayments and dividends
from loans and investments
*Factor earnings – a credit entry
*Factor payments – a debit entry
* Factor income balance – the sum of earnings and
payments.
*
*Capital Account = Foreign direct investment +
Portfolio investment + other investment +
Reserve account
*Current Account=trade balance + Service +
Income-Transfers
*BALANCE OF PAYMENTS SURPLUS
*BALANCE OF PAYMENTS DEFICIT
*CAPITAL ACCOUNT DEFICIT
*BALANCE OF TRADE SURPLUS
*
*Running a deficit on the current account means
that the country is not paying its way in the
global economy. There is a net outflow of
demand and income from the circular flow of
income and spending.
*
* High income elasticity of demand for
imports – when consumer spending is strong,
the volume of imports grows quickly
* Long-term decline in the capacity of
manufacturing industry because of de-
industrialization.
*High income elasticity of demand for imports
*Long-term decline in the capacity of manufacturing
industry because of de-industrialization.
*The Sri Lanka is a net importer of foodstuffs and
beverages and has also seen a sharp rise in spending
on imports of oil and gas.
*The trade balance is vulnerable to shifts in world
commodity prices and exchange rates. The Sri
Lanka imports a large volume of raw materials,
component parts and pieces of capital equipment.
Balance of payment

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Balance of payment

  • 3. * *The balance of payments (BOP) records financial transactions made between consumers, businesses and the government in one country with others
  • 4. *A record of all transactions made between one particular country and all other countries during a specified period of time.
  • 5. * *The Current Account *The Capital and financial Account *Official Settlements Account *Errors and Omissions
  • 6. * *Income Growth *External orientation *Relationship between trade in goods and services and direct investment flows *Links between the exchange rate and the current and financial accounts *International banking transactions *Assets securitization and financial market developments *External debt situation
  • 7. * *Trade – buying and selling of goods and services *Exports – a credit entry *Imports – a debit entry * Trade balance – the sum of Exports and Imports *Factor income – repayments and dividends from loans and investments *Factor earnings – a credit entry *Factor payments – a debit entry * Factor income balance – the sum of earnings and payments.
  • 8. * *Capital Account = Foreign direct investment + Portfolio investment + other investment + Reserve account *Current Account=trade balance + Service + Income-Transfers
  • 9. *BALANCE OF PAYMENTS SURPLUS *BALANCE OF PAYMENTS DEFICIT *CAPITAL ACCOUNT DEFICIT *BALANCE OF TRADE SURPLUS
  • 10. * *Running a deficit on the current account means that the country is not paying its way in the global economy. There is a net outflow of demand and income from the circular flow of income and spending.
  • 11. * * High income elasticity of demand for imports – when consumer spending is strong, the volume of imports grows quickly * Long-term decline in the capacity of manufacturing industry because of de- industrialization.
  • 12. *High income elasticity of demand for imports *Long-term decline in the capacity of manufacturing industry because of de-industrialization. *The Sri Lanka is a net importer of foodstuffs and beverages and has also seen a sharp rise in spending on imports of oil and gas. *The trade balance is vulnerable to shifts in world commodity prices and exchange rates. The Sri Lanka imports a large volume of raw materials, component parts and pieces of capital equipment.