In international transactions must have a source (our “plus” inpayment or credit transactions).

Payments deficits and surpluses. Although the balance of payments must always balance or sum

to zero, economists and political officials frequently speak of balance of payments deficits and surpluses.

In doing so they are referring to the “current and capital account balance” shown as item 13

In Table 9. If this is a negative item, a balance of payments deficit is being realized as was the case

for the United States. This means that the United States earned less foreign monies from all of its

trade and financial transactions than it used.

If the current and capital account balance were positive, then the United States would be faced

with a balance of payments surplus.

A decrease in official reserves (shown by a positive official reserves item in Table 14.1) measures

a nation’s balance of payments deficit; an increase in official reserves (shown by a negative official

reserves item) measures its balance of payments surplus.

Similarly, any nation’s official reserves are limited. Therefore, persistent or long-term payments

deficits, which must be financed by drawing down those reserves, would ultimately cause reserves

to be depleted. In this case that nation would have to undertake specific policies to correct its

balance of payments. These policies might entail painful macroeconomic adjustments, the use of

trade barriers and similar restrictions, or changing the international value of its currency.

Conclusions:

1. The balance of payments records all of the international trade and financial transactions

which take place between a given nation and the rest of the world. The trade balance compares

merchandise exports and imports. The balance on goods and services compares exports and imports

of both goods and services. The current account balance considers not only goods and services

transactions, but also net investment income and net transfers.

2. A deficit on the current account will be largely offset by a surplus on the capital account.

Conversely, a surplus on the current account will be largely offset by a deficit on the capital account.

A balance of payments deficit occurs when the sum of the current and capital accounts is in

deficit. A payments deficit is financed by drawing down official reserves. A balance of payments

surplus occurs when the sum of the current and capital accounts is in surplus. A payments surplus

results in an increase in official reserves. The desirability of a balance of payments deficit or surplus

depends upon its causes and its persistence over time.

14.4.1. Terminological Vocabulary to Text 14.4. Try to memorize it

1. balance of payments — платежный баланс

2. current accounts — счет текущих операций (текущие операции)

3. flow, inflow (of capital) — приток (капитала)

4. outflow (of capital) — отток (капитала)

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5. merchandise export/import — товарный экспорт/импорт

6. trade balance — торговый баланс

7. favourable balance of trade (a trade surplus) — положительное сальдо торгового баланса

(активный торговый баланс)

8. foreign trade deficit (a trade deficit) — внешнеторговый дефицит, или unfavorable balance

of trade — отрицательное сальдо торгового баланса (пассивный торговый баланс)

9. capital account — счет движения капиталов

10. inpayment — платеж (поступление денег)

11. surplus — актив

12. favourable balance, active balance, active surplus, surplus — активное сальдо

13. unfavourable balance, passive balance, adverse balance, negative balance — пассивное, отрицательное

сальдо

14. net differences — несбалансированность

15. trade balance — торговый баланс

16. foreign trade deficit — внешнеторговый баланс

14.4.2. Commentary and Notes to Text 14.4

1. a sharp fuel and raw materials trend of exports — резкая топливно-сырьевая направленность

экспорта

2. comparison of exports and imports — сопоставление экспорта и импорта

3. capital account balance — движение капитала (счет движения капитала)

4. item — пункт

5. to designate — пометить

6. to use up foreign exchange — расходовать иностранную валюту

7. to refer to... — ссылаться на...

8. balance on goods and services — баланс товаров и услуг

14.5. Reading for Specific Information + Language Study

14.5.1. Oral Practice. Work with a partner and discuss these comprehension questions on text 14.4.

1. In what document is the wide variety of international transactions which create a demand for

and generate a supply of a given currency reflected?

2. What does a nation’s balance of payments statement record? Which transactions can be included

in this statement?

3. Which transactions can be shown in the current account? Why are exports designated with

a plus sign while imports are designated with a minus sign?

4. What does the trade balance imply?

5. In what case does a trade surplus, or “favourable balance of trade,” occur and when does a trade

deficit, or “unfavourable balance of trade,” occur?

6. What does the balance on goods and services show? What was the balance in the case of the

USA?

7. In what way can a nation’s balance on current account be attained? Show it by the US example.

8. What does the capital account reflect in a nation’s balance of payments?

9. Which capital transactions generate supplies of foreign currencies or, conversely, use up or

exhaust supplies of foreign currency?

10. What is the general feature of debit or outpayment transactions?

11. In what case does the favourable balance on the capital account (in other words, a capital

account surplus) occur?

12. Are the current and capital accounts interrelated, and in what way?

13. What does the current account deficit tell us in the given example (see the text)?

14. In what way is a nation’s current account deficit financed?

15. Can official reserves be used to settle any net differences in current and capital account balances?

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14.5.2. Oral/Written Practice. Find the English equivalents in Text 14.4

Compare your answers with those of your partner.

• спектр международных и финансовых операций

• статьи платежного баланса

• товарный экспорт выступает как кредит

• импорт считается дебетом

• баланс товарной торговли

• торговый баланс

• положительное/отрицательное сальдо торгового баланса

• внешнеторговый дефицит

• услуги резидентам иностранных государств

• баланс товаров и услуг

• баланс по текущим операциям

• чистые доходы на (от) инвестиции (-ий) представляют собой избыток платежей по

процентам и дивидендам

• дефицит текущего баланса

• счет движения капиталов

• статьи прихода или поступления платежей

• дебетные операции, связанные с выплатой средств за рубеж

• баланс счетов движения капиталов

• положительное/отрицательное сальдо баланса счетов движения капиталов

• осуществлять финансирование дефицита

• актив баланса движения капиталов и кредитов

• актив текущего платежного баланса страны

• отток капитала

• урегулирование несбалансированности платежного баланса

• актив баланса счетов движения капиталов

• пассив баланса счетов текущих операций

• составные части платежного баланса

• масштабы дефицита платежного баланса

• величина активного сальдо платежного баланса