Story: Balance of payments

Elements of the balance of payments

This table shows the three different accounts that make up New Zealand’s balance of payments. New Zealand usually has a deficit on its current account, because the country imports more goods and services than it exports, and there is generally more money flowing out to people who have invested in New Zealand than New Zealanders receive from overseas assets. The deficit is made up by a surplus on the financial account, which is the country’s net borrowing, as New Zealand borrows more from overseas than it lends. If the financial account surplus does not exactly match the current-account deficit, this is explained by the capital account, which includes small movements of capital such as migrants’ transfers, and by any residual errors.

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How to cite this page:

C. John McDermott and Rishab Sethi, 'Balance of payments - What is the balance of payments?', Te Ara - the Encyclopedia of New Zealand, (accessed 6 December 2022)

Story by C. John McDermott and Rishab Sethi, published 11 Mar 2010