Question

The table below gives contains hypothetical international balance of payment data for Australia.
All figures are in billions. Calculate the missing elements (i) – (vi), with the appropriate sign
(+ or -) and enter the values in the table

INTERNATIONAL BALANCE OF PAYMENTS	(HYPOTHETICAL DATA)
CURRENT ACCOUNT
(1) Goods exports	+150
(2) Goods imports	-200
(3) Goods balance	(i)
(4) Services exports	+75
(5) Services imports	-60
(6) Goods and services balance	(ii)
(7) Income balance	+12
(8) Current transfers net	-7
(9) Current account balance	(iii)
CAPITAL AND FINANCIAL ACCOUNT
(10) Capital account balance	-10
11) Financial account balance	+90
(12) Direct Investment	+65
(13) Portfolio Investment	(iv)
(14) Financial Derivatives	0
(15) Other Investment	0
(16) Reserve assets	-5
(17) Capital and financial account balance	(v)
(18) Net errors and omission	(vi)

Answer 1

(i) Goods Balance = (+150 -200) = -50

(ii) Good and service balance = ( Net Good Balance + Net Service balance )

Net service balance = (+75 - 60) = + 15

Goods and service balance = ( -50 +15) = -35

(iii) Total current account balance = ( Goods and service balance + Income balance - Net current transfer )

= ( -35 + 12 -7 ) = -30

(iv) Portfolio investment is the total investment made by the country includes all assets who's income credited in current account except direct investment.

= ( Financial account balance + Reserve assets)

= ( 90 -5 ) = +85

(v) Capital and finance account balance = ( Capital account balance + Portfolio investment + Direct investment)

= ( -10 +85 +65 ) = +140

(vi) Net error and omission = ( Net balance of capital and finance account - Net Balance of current account)

[ 140 - (-30)] = +170