Balance of payement

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Topic
:
Balance of Payment  

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Contents :
♣ Introduction
♣ Trade
Visible
Invisible
♣ Parts/Accounts of Balance of Payment
Current Accounts
Capital Accounts
Official/Gold Reserved
♣ Effect of Balance of Payment
Positive
Negative
♣ Suggestions
♣ Balance of Balance of Payment
♣ Equilibrium of Balance of Payment
♣ Pakistan's Balance of Trade
♣ Refrences
♣ Own Quotation

4. What Is Balance of Payment?
All records of economic transaction of a country with rest,
for a particular period(Commonly for one year), is known as
balance of payment.
E.g. Import, Export, Investment, Landing, Borrowing,
etcetera.
Balance of payment is also known as balance of
international payment, and it is abbreviated as “BoP”.
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By: Wikipedia.org

5. Visible and Invisible Trade:
Visible Trade:
Importing and exporting of all final goods producing in one
country and trade with rest is known as visible trade.
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Invisible Trade:
Importing and exporting of services within two countries is
known as invisible trade.
(Introduction to Economics & Finance)
By: Abdul Haleem Khawja

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Parts/Accounts of Balance of Payment:
There are three parts or accounts of balance of payment
 Current Accounts
 Capital Accounts
 Official/Gold Reserved
In this account we record a countries all export and
import of all goods and services. And unrequited
transfer is also recorded in this account.
Current Account:

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Capital Account:
The export and import of capital is recorded in this
account.
If we have a surplus capital, so that surplus is
exported by investing it to another country, buy gold
from international market or loan to another country
with interest. And vice versa.
Official/Gold Reserved:
In this part we include/record reserves of gold and
foreign exchange accordance to our capital, if we
have a surplus capital our reserves will increase and
vice versa. (Introduction to Economics & Finance)
By: Abdul Haleem Khawja
& Sir Tahal Kumar

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Effects of Balance of Payment :
If our balance of payment is positive, it meant our economic
level is up, there is no any inflation in our country, best and
branded product are available at cheap price, our export
increases, and our income also increase.
And through that income we can produce enough goods and
services, and we can land loan to other countries with some
interest.
We will be nominated in developed countries, our markets
will be re-enter into the international capital markets.
Positive:

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Effects of Balance of Payment :
If our balance of payment is negative, it meant our
economic level is down, there is a high level of inflation,
loss in business and energy crisis in our country, our
import increases, and our income decreases.
Now because of lack of income, we borrow loan from
other countries, and in return with some interest.
Our currency level goes down, we will be nominated/listed
in less developed countries.
Negative:
By: Youtube.com

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Suggestion:
Maximize Export.
Produce wealthy goods and services.
Maximize Production.
Increase usage of modern technologies.
Optimum usage of resources.
Stable Environment.
Reduce wastage of resources.
Reduce energy crisis.
Reduce import.
Improve Economic System.
By: Me

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Balance of Balance of Payment:
Balance of Payment goes positive when
Our export increases.
International investor invest in our country.
Outside income increases.
Free international aid are received.
Overseas remittance increases.
Land loan with interest to other countries.
Equilibrium of Balance of Payment:
We can define equilibrium of balance of payment as
“When our export is equals to our import.”
By: BBA Part-04
(Introduction to Economics & Finance)
By: Abdul Haleem Khawja

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Pakistan trade deficit widened to PKR: 242 billion in
September of 2016 compared to 180.8 billion a year ago.
That’s mean in current period Pakistan faces the deficit
of PKR: 61.8 billion.
Exports till September of 2016 are PKR 161.3 billion
while imports jumped to PKR 403.3 billion.
This indicates that in current year Pakistan import PKR:
242 billion up to its export.
Pakistan's Balance of Trade:
By:
www.tradingeconomics.com/pakistan/balance
-of-trade

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References:
Introduction to Economics & Finance
Sir Tahal Kumar
Sir Hakim Ali
BBA Part-04
www.Wikipedia.org
www.youtube.com
www.study.com
www.tradingeconomics.com

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“Government as well as every single
Citizen has to play its Own and a Vital
role to bring Positive changes into the
Nation”