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
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Direct | September 2026–June 2027 |
| FIA | FBT | Direct | September 2026–June 2027 |
