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Euro - Millions
Balance of payments
Services: In the country's relationship with foreign countries, the balance of services s
or imports more services than it exports (negative balance or deficit) to the rest of the
Primary income: In the country's relationship with foreign countries, the balance of pri
balance or surplus) or more primary income leaving the country for the rest of the wor
Secondary income: In the country's relationship with foreign countries, the balance of
(positive balance or surplus) or more secondary income leaving the country for the re
Direct investment: The balance of direct investment shows whether the country is attr
balance). It also includes investment in real estate.
Portfolio investment: The balance of the portfolio investment shows whether the coun
(positive balance).
Concepts
Name Description
Reserve Assets
Current Account
Capital Account
Balance of Payments
Financial Account
Portfolio Investment
Direct Investment
Series
with foreign countries, the balance of services shows whether the country exports more services than it imports (positive balance or surp
s (negative balance or deficit) to the rest of the world.
nship with foreign countries, the balance of primary income shows whether there is more primary income entering the country (positive
ome leaving the country for the rest of the world (negative balance or deficit).
ationship with foreign countries, the balance of secondary income shows whether there is more secondary income entering the country
econdary income leaving the country for the rest of the world (negative balance or deficit).
t investment shows whether the country is attracting more investment from abroad (negative balance) or investing more abroad (positiv
real estate.
e portfolio investment shows whether the country is attracting more investment from abroad (negative balance) or investing more abroad
Definition
Reserve assets are those external assets that are readily available to and controlled by monetary
authorities for meeting balance of payments financing needs, for intervention in exchange markets
manage the currency exchange rate, and for other related purposes (such as maintaining confiden
in the currency and the economy, or serving as a basis for foreign borrowing). Reserve assets mu
be foreign currency assets, claims vis-à-vis non-residents and assets that actually exist. Potential
assets are excluded. Underlying the concept of reserve assets are the notions of ‘control’ and
‘availability for use’ by the monetary authorities. (metadata – European Commission)
The current account shows flows of goods, services, primary and secondary income between
residents and non-residents. (metadata – European Commission)
The capital account covers the acquisition/disposal of non-produced non-financial assets and cap
transfers. (metadata – European Commission)
The balance of payments is a statistical statement that summarizes transactions between residen
and nonresidents during a period. It consists of the goods and services account, the primary incom
account, the secondary income account, the capital account, and the financial account. The basic
principle of double-entry bookkeeping used in constructing the balance of payments implies that th
sum of all international transactions—current, capital, and financial—is in principle equal to zero.
Accordingly, the financial account shows how the sum of the current account and capital account
balances is financed. (metadata – IMF)
The financial account records transactions that involve financial assets and liabilities that have tak
place between residents and non-residents. The financial account shows transactions in net terms
net acquisitions of financial assets correspond to acquisitions of assets less reductions in assets.T
financial account indicates the functional categories, sectors, instruments, and maturities used for
international financing transactions. It comprises: direct investment; portfolio investment; financial
derivatives (other than reserves) and employee stock options; other investment; and reserve asse
(metadata – IMF and European Commission)
This component covers moveable goods for which a change of ownership occurs between residen
and non-residents.
General merchandise on a balance of payments (BOP) basis covers goods for which a change of
economic ownership occurs between a resident and a non-resident and that are not included in ot
specific categories, such as goods under merchanting and nonmonetary gold, or as part of a serv
General merchandise should be measured at market value on a free on board (FOB) basis. In the
countries’ contribution to the compilation of Union aggregates, imports and exports of goods in qu
transit trade have to be included and, for intra-Union trade, the partner country should be defined
according to the consignment principle.
Employee stock options are options to buy the equity of a company offered to employees of the
company as a form of remuneration. If a stock option granted to employees can be traded on
financial markets without restriction, it is classified as a financial derivative. (metadata – European
Commission)
Portfolio investment includes transactions and positions involving debt or equity securities, other t
those included in direct investment or reserve assets. Portfolio investment includes Equity securiti
Investment fund shares and Debt securities, unless they are categorised either as direct investme
or as reserve assets. Transactions as repurchase agreements and securities lending are excluded
from portfolio investment. (metadata – European Commission)
Direct investment is associated with a resident in one economy (direct investor) having control or
significant degree of influence on the management of an enterprise that is resident in another
economy (direct investment enterprise). Following the international standards, the direct or indirec
ownership of 10 % or more of the voting power of an enterprise resident in one economy by an
investor resident in another economy is evidence of such a relationship. Based on this criterion, a
direct investment relationship can exist between a number of related enterprises, regardless of
whether the linkage involves a single or a number of chains. It can extend to a direct investment
enterprise’s subsidiaries, sub-subsidiaries and associates. Once the direct investment is establish
all subsequent financial flows/holdings between the related entities are recorded as direct investm
transactions/positions. (metadata – European Commission)
Primary income represents the return that accrues to institutional units for their contribution to the
production process, or for the provision of financial assets or from renting natural resources to oth
institutional units. It comprises Compensation of employees, Investment income and Other primar
income. (metadata – European Commission)
The secondary income account shows current transfers between residents and non-residents. A
transfer is an entry that corresponds to the provision of a good, service, financial asset, or other n
produced asset by an institutional unit to another institutional unit where there is no corresponding
return of an item of economic value. Current transfers consist of all transfers that are not capital
transfers. Current transfers are classified according to the institutional sector making or receiving t
transfer in the compiling economy (General government or Other sectors). (metadata – European
Commission)
Services are the result of a production activity that changes the conditions of the consuming units,
facilitates the exchange of products or financial assets. Services are not generally separate items
over which ownership rights can be established and cannot generally be separated from their
production. It comprises: manufacturing services on physical inputs owned by others; aintenance
repair services not included elsewhere; transport; travel; construction; insurance and pension
services; financial services; charges for the use of intellectual property not included elsewhere;
telecommunication, computer and information services; other business services; personal, cultura
and recreational services; government goods and services not included elsewhere. (metadata –
European Commission)