If we import goods from the we have to obtain US dollars to make payment, and these can best be obtained by selling some of our own goods or services to the USA.

 
If we can sell to them exactly as much as we buy from them, we have a balance of payments. However, it is more usual that one party buys more from the other than it is able to sell. A country must, therefore, achieve an overall balance of payments with all the countries with which it trades.

 
The Balance of Payments is a set of official national accounts, which show the transactions occurring between the and the rest of the world. They are published yearly.

 
The accounts are cast as shown below. The balance on goods and that on services being added to the balances for movements of capital, such as investment and Government transfers, to arrive at what is called the Current Account.

 
The main terms which need to be understood are:
 

Balance on goods	The account for trade in manufactured goods and raw materials.
Balance on services	The account showing balances on trade in services.
Current account	This is the account that includes virtually everything that we would recognise as trade as well as some other things such as net investment income.
	It includes:                       Balance on goods Balance on services Balance on investment income Balance on Government transfers
	Shows the 's net earnings or net payments in respect of what it owns in the rest of the world.
Balance of payments	The overall "accounts" for the 's trade with the rest of the world.