Definition
- Balance of trade
- The balance of trade is the gap, if any, between the value of a nation's exports and its imports.
- Not to be confused with: Current account balance
- The current account balance is a broad measure of a country's trade that includes goods and services as well as international flows of income and transfers.
Test yourself
What is the difference between balance of trade and current account balance?
The balance of trade covers exports and imports only; the current account adds income and transfers.