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Current account (balance of payments)

The current account in the balance of payments records transactions in goods, services, primary income and secondary income between residents and non-residents. Its balance combines net trade with net income and current transfers. A deficit or surplus describes these flows over a period, rather than a bank-account balance or a complete measure of an economy’s financial strength. Understanding its causes and financing matters more than assuming that every deficit is necessarily harmful.

Worked example

Net exports are €12 billion, net primary income is €4 billion and net secondary income is minus €6 billion. The current-account surplus is €10 billion: 12 + 4 − 6.

Common mistake

This current account is not an individual’s bank account or a partner’s current account. Keep the economic context in the term label.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA BT Direct September 2026–June 2027
FIA FBT Direct September 2026–June 2027