How to draw up a trade balance. Foreign trade balance

Can be easily determined by its trade balance. Trade balance indicators should be called a litmus test that changes color depending on the unfavorable conditions. To monitor the economic development of a single country or group of states, it is the method of studying the trade balance that is used.

Balance of foreign trade

Each country sells its products and services to other countries and buys from them what it does not produce at home. If you sum up all the funds received from exports and count all those paid for, over a certain period of time, then the net balance will result in a reliable indicator of foreign trade, which is usually called the foreign trade balance. Transactions paid for with own or borrowed funds are taken into account here. For economic analysis, data from an individual country or a group of states can be taken, depending on what goals are being pursued.

and its indicators

In economic terminology, the most commonly used word is “balance”. A positive trade balance means that a country has sold more of its goods than it bought. Conversely, a negative balance indicates the dominance of the import component in the country’s overall balance.

What's wrong with a country buying a lot of foreign products, industrial products, medicines, innovative technologies, etc.? The fact is that the state purchases all this for the currency received from the sale of its goods. It turns out that the foreign exchange flows received through exports are not equivalent to the amounts spent on imports. That is, there is not enough currency to purchase imported goods in the required volume. To cover the deficit, the country needs to open the bins in which the strategic one is located and begin to sell it on the international foreign exchange market, and with the received currency to cover the missing funds for imports. Therefore, a negative trade balance is a serious economic signal that the economy is not developing as expected. In this case, the governments of countries are taking emergency measures to correct the situation, which include:

• in the analysis of the current situation;
• in improving the quality of the entire export product;
• in updating outdated technologies to innovative systems;
• in search of new markets and their active monitoring.

Prompt government intervention in the economic situation almost always produces positive results.

Is a negative balance also a good thing?

The highly developed countries of Europe, America, and Asia know how to turn negative balances in their balance sheets to their advantage. This approach to business can be seen in the USA, England and Germany. A negative balance in the economy helps reduce inflation by moving some dominant industries beyond the country's external borders. But for undeveloped countries this situation is economically more dangerous. A negative balance systematically washes away the currency available in the country, building a corridor for the depreciation of national money. There comes a time when the state cannot repay the loans taken with interest. Illustrative examples demonstrated by Greece, Ukraine and other countries that were on the verge of default.

Throughout the year, special institutes scrupulously collect and systematize the necessary data, publishing them in specialized printed publications and forms. Having studied the annual balance, economists can with a high degree of probability predict the development of national economies, taking into account all the negative factors affecting it.

Adjusting the balance of foreign trade

A complex process is the regulation of the balance of payments or trade. Both of them are characterized by extreme instability. The instability factor is caused difficult situation with a lack of finance in some states and a surplus in others. The difference in financial potential disrupts the global balance of capital, which affects the economic state of the country. Today, regulation of the balance of payments is included in the list of main functions of financiers who are developing strategies and tactics to combat inflation and ever-growing unemployment.

Stay up to date with all the important events of United Traders - subscribe to our

Foreign trade balance of the country- the ratio of the value of goods exported by any country or group of countries and the value of goods imported by them for a certain period of time, for example, for a year, quarter, month. The foreign trade balance includes goods transactions actually paid for and carried out on credit. The foreign trade balance is compiled for individual countries and groups of states.

Negative balance

A negative trade balance in countries such as the USA and Great Britain makes it possible to curb inflation and maintain a high standard of living by transferring labor-intensive production outside the state [ ] . Such countries have capital-intensive and high-tech sectors of the economy, which attract significant amounts of capital from around the world in the form of portfolio or direct investment. However, due to the lack of competitiveness of export industries, these countries are forced to cover the bulk of the trade deficit by issuing private and government debt instruments [ ] . In the United States, the trade deficit, according to the Bureau of Economic Analysis, was $836 billion in 2006.

In underdeveloped countries, a negative trade balance indicates the uncompetitiveness of export sectors of the economy, which often leads to devaluation (depreciation) Money such countries due to the fact that they cannot pay for import purchases [

The purpose of this article is to study theoretical aspects trade balance, its role, main items and factors influencing it. To achieve this goal, it is necessary to solve the following tasks: - consider the concept and essence of the trade balance; - study its main features.

• Improving the formation of a capital repair fund in apartment buildings
• Regulatory and legal regulation of issues of assessing the quality of provided state (municipal) services in Russia

The relevance of this topic cannot be exaggerated, since the trade balance is a mirror reflection of the economic state of the country. modern conditions It is difficult to predict or actively participate in the international monetary and financial system without taking into account the role of the country's trade balance.

The purpose of this article is to study the theoretical aspects of the trade balance, its role, main items and factors influencing it.

To achieve this goal, it is necessary to solve the following tasks:

• consider the concept and essence of the trade balance;
• study its main features

Trade balance(Trade Balance, TB) - part of the balance of payments that characterizes the country’s trade relations with other states. Its components are the export and import of goods. The trade balance is the difference between the amount of exports and the amount of imports of a country's goods. The trade balance characterizes, first of all, the competitiveness of a country's goods abroad. The predominance of exports over imports (positive trade balance) indicates that there is an influx of foreign currency into the country, and the exchange rate of the national currency rises. Conversely, the predominance of imports over exports (negative balance or trade deficit) means low competitiveness of the country’s goods abroad. (1, p.3)

The beginning of the emergence of the concept of “balance of payments”, according to its modern understanding, can be considered the appearance of the term “balance of trade”. It was first used by Edward Misselden in his treatise “The Circle of Trade” (1623), where the first calculations of the balance of trade for England for 1621 were made.

The concept of “trade balance” is further developed in the works of Thomas Mann. In the book "The Wealth of England in foreign trade"(1664) the author introduces the concept of “general balance of trade.” T. Mann notes that deficits in foreign trade with some countries can be compensated by a positive balance with other countries, therefore the assessment of foreign trade activity should be carried out on the basis of the overall trade balance.

The term " payment balance" was first used by an English economist, one of largest representatives late mercantilism (from Italian mercante - merchant, merchant), the first school of bourgeois political economy) James Stuart (1712-80). In his work "Inquiries into the Principles of Political Economy" (1767), he was the first to point out and examine in detail the relationship between foreign trade and the movement of capital. D. Stewart defines the balance of payments as an independent concept, which consists of (7, p. 57):

1. Expenses of citizens abroad.
2. Payments of debts, principal and interest to foreigners.
3. Providing cash loans to other countries.

The role of the trade balance in the Russian economy

In Russia, a positive trade balance has been observed throughout the entire history of statistics. The attitude towards a country's trade balance surplus or deficit depends on a number of factors that determine the position of this country in the world economy, the characteristics of business relations with partners, the characteristics and share of the main items of the trade balance, etc.

Thus, the attitude towards a positive trade balance in Russia is quite contradictory. Despite the increasing gap between exports over imports, which forms a positive trade balance, the qualitative characteristics of this surplus cannot but cause concern among economists for at least a decade.

The main source of surplus and the main export item are natural resources actively exported from Russia. And specific export growth natural resources shows growth dynamics throughout the entire time statistical observation. As we can see, quantitative growth in exports has been observed throughout the last decade. The fall in exports and imports of goods in monetary terms in 2009 was due to the active phase of the global financial and economic crisis, but within 2 years the fall was recouped, and trade indicators at the end of 2011 reached record levels. It is also worth paying attention to the fact that, as such, the export of natural resources did not fall quantitatively during the crisis. (paraphrase of source 2, p. 15)

Conclusion

In conclusion, it should be noted that the trade balance is one of the main tools for macroeconomic analysis and forecasting.

Trade balance is the relationship between the sum of prices of goods exported by a country or group of countries and the sum of prices of goods imported by them for a certain period of time, for example, for a year, quarter, month. In other words, the trade balance is the exports and imports of a country for a certain period or date.

If the cost of exporting a country's goods exceeds the cost of importing them, then the trade balance is active. If the cost of imports exceeds the cost of exports, then such a trade balance is passive. If the cost of export and import coincides, a net balance is formed. A country with a passive trade balance must cover the deficit by spending various balance of payments receipts, in particular income from the transportation of foreign goods on its means of transport or through its territory, interest and dividends from capital investments abroad, the influx of foreign capital, foreign loans, the use of reserves foreign currencies and gold exports. A trade surplus largely characterizes the favorable economic position of a given country and is one of the important indicators of the degree of dependence of its economy on foreign markets, on the state of the market, international competition, as well as political dependence on other states.

Balance of payments data reflects how trade with other countries developed during the reporting period, which directly affects the level of production, employment and consumption, how much income was received from non-residents and how much was paid to them. These data make it possible to trace the form in which foreign investment was attracted, whether the country's external debt was repaid on time or there were arrears and its restructuring, as well as how residents invested in the economies of other countries, how the Central Bank eliminated payment imbalances by increasing or decreasing its foreign currency reserves.

The balance of payments is actively used to determine fiscal and monetary policies, protectionist measures, as well as when making decisions on regulating the domestic foreign exchange market and exchange rate.Based on the results of the balance of payments, further decisions are made in the field of the country's economic policy.

A distinctive feature of Russia from other countries with transitive economies is its huge resource potential, which allows you to maintain an active current account balance, mainly due to a positive trade balance.

For Russia, financing the capital account deficit of the balance of payments is more relevant than the financing of the current account balance. However, this cannot be called a plus for the economy, since the positive current account balance is a reflection of Russia’s low investment attractiveness.

Bibliography

1. Litvintsev N.N. Trade balance. Textbook edited by Litvintsev, 1st edition, 2010.240 p.
2. Aleksashenko S. The landslide is over, the crisis continues // Questions of Economics. 2009. - No. 5. - P. 4 - 20.
3. Buglai V. B., Litvintsev N. N. International economic relations: Textbook. allowance/Ed. Litvintseva N.N. - 2nd ed. - M.: Finance and Statistics, 2008. - 160 p.
4. Bulletin of the Bank of Russia. 2012. - No. 48 - 49.
5. Zhuravlev S. Stopping without a requirement // Expert. 2012. - No. 2. - P. 28 - 33.
6. Ivashevsky S. N. Macroeconomics.—Moscow, 2010
7. History of Economic Thought. /Under. ed. V. Avtonomova, O. Ananina, N. Makasheva: tutorial. - M.: INFRA-M, 2007. - 784 p.

The trade balance is a certain part of the payment payment, which characterizes the state’s trade relations with other countries. Its components include import and export of goods. Thus, the balance of trade represents the difference between the volumes of imports and exports of various goods. If there is a significant predominance of exports over imports, this indicates that there is a fairly large influx of foreign currency into the country, as a result of which the exchange rate of the national currency begins to increase. Likewise, if the trade balance shows that there is too much dominance of imports over exports, then this indicates that the country's goods have a rather low competitiveness abroad. This information is published every month, but the foreign exchange market often reacts poorly to this information.

What it is?

As mentioned above, a country’s trade balance is the ratio of the value of imports and exports of certain products over a separate period of time. The foreign trade balance, in parallel with actually paid contracts, also includes those transactions that were carried out on credit. When contracts are actually paid, the foreign trade balance represents a separate element of the country's balance of payments.

What does it show?

Russia's trade balance is one of the most important indicators reflecting how effectively a country participates in international trade, as a result of which it represents a separate part of the balance of payments. This balance is the ratio between the sum of the prices of goods that were exported abroad, as well as the sum of the costs of products that were imported into the country. Initially carried out detailed analysis exports because they directly affect how much the economy grows.

Imports, in turn, determine the demand for goods directly within the country, and if imports grow, then the formation of inventories is determined, which may indicate a possible further slow growth in sales. The trade balance formula can show different results, since they are highly dependent on the exchange rate, which adjusts the nominal amount of import receipts in national currency.

Why is it needed?

In the vast majority of cases, the trade balance formula is calculated for the year and includes the cost of all goods that were purchased or sold on instant payment terms, supplied on credit or even absolutely free of charge in the form of government assistance or a gift. It is worth noting that, minus the latter indicators, the active trade balance is entered directly into the balance of payments.

The active part of this balance reflects the export of products that were produced, mined or grown in the country, as well as all kinds of goods that were previously imported into the country from abroad and subsequently underwent some processing. The passive part includes the import of foreign products for the purpose of domestic consumption or processing with further export. The difference between the price of imports and exports is the trade balance. A positive trade balance is a situation in which the price of exports is greater than the price of imports, otherwise the balance is called a deficit. If the passive and active parts of the trade balance are equal, then it is called “net balance”.

How is it composed?

The compilation of the trade balance is carried out by the authorized financial statistical and foreign trade authorities of each individual country. It is worth noting that if the trade balance of a trading enterprise is considered, then in this case it is determined by the department of relevant specialists.

These calculations are carried out in order to determine the foreign economic position of a company or country, to clarify the level of competitiveness of its own products, as well as the purchasing power of the national currency used. Technology for calculating the cost of imports and exports in various countries differs in its own characteristics, and therefore it is quite difficult to compare the corresponding indicators.

The UN Statistical Commission recommends that all countries use a single technology in relation to the system itself, as well as the basis for recording price indicators in their own foreign trade. In particular, when forming a trade balance, it is necessary to take into account the price of all imported goods, based on an FOB basis, that is, the price of an imported product includes its price at the border or at various exit ports of the selling country, as well as all kinds of costs associated with insurance or delivery of products to the border of the consumer country. In this case, the price of the exported goods bears all the seller’s expenses associated with the delivery of the goods to the output port or to its own border, including all kinds of duties and other similar fees.

The economy directly depends on what the trade balance will be. In this regard, in the vast majority of cases, when compiling a trade balance, countries fully comply with the technology recommended by the UN Statistical Commission. Approximately 30 countries record import and export prices based on FOB.

Trade balance of capitalist countries

The balance sheet of capitalist countries includes the spontaneous nature of economic development, the aggravation of the situation on the existing sales market, inflation, the currency crisis and many other processes. The uneven political and economic development of capitalism is reflected in a change in the balance of power between several competitors, as well as in a significant intensification of the trade war between countries or customs and economic groupings of various imperialist states.

In the current practice of capitalist countries, such technologies for equalizing the trade balance as introducing customs duties, quantitative restrictions on the import of certain products, all kinds of credit and tax benefits, devaluation, revaluation, financing of exports from the budget, the introduction of multiple exchange rates, as well as a number of other methods.

How does this reflect?

If the whole world buys the export goods of a certain country, but buyers in the domestic market also prefer to buy domestic goods, then in this case we can say that the economy of this country is in good condition. At the same time, the trade deficit shows that the country's goods are not the most competitive, and its residents must take certain actions in order to protect their own standard of living.

However, such an analysis is fair if the reason for changes in the trade balance was a decrease or increase in demand for goods of this state, but it is worth noting the fact that in fact this indicator can be influenced by many other reasons , including also a good investment climate, which generates an influx of investment into the country, and consequently, an increase in purchases of equipment abroad, which ultimately leads to a trade deficit, despite the fact that the state of the economy of a given state is not getting worse.

Current account balance

The current account balance can be called the most informative, since it includes absolutely all asset flows, including official and private, which are associated with the movement of all kinds of services and goods. A positive current account balance indicates that the country's credit has higher rates than the debit for the movement of services and goods, and also demonstrates the volume of obligations of non-residents relative to residents.

In other words, if there is a positive balance, then this indicates that this country represents a net investor relative to other states. At the same time, if there is a current account deficit, this indicates that this state over time, it becomes a net debtor and must pay for additional net imports of products.

How important is it?

In the process of development of the economic school of mercantilists, equilibrium was established in accordance with the terms of the balance on the current account, while this balance did not take into account capital movements, as well as all kinds of changes that occurred in the gold and foreign exchange reserves of a particular country. Thus, the main objective of economic policy in this case was to maximize the current account surplus in order to ensure the accumulation of gold in the country. Today, it is already obvious that such a statement is not without foundation, because it is the state of the active account that has a direct impact on the real income of the state, as well as the standard of living of the people living in it.

Thus, in the process of integrating the active account into current system national accounts, it can be determined that the occurrence of a deficit in this account indicates that the country’s expenses significantly exceed its income, which cannot be financed in any other way except through the influx of foreign borrowed capital for a long period.

Features of a closed economic system

In closed conditions economic system savings should have the same value as investment, while in an open economy these indicators may differ depending on the state of the current account. If there is an excess of imports over exports, then this implies that investment has a higher value compared to saving in the amount of the deficit, which cannot be the case if there is no influx of long-term foreign capital aimed at financing the deficit.

Possible risks

However, there is a danger of maintaining the current account deficit through long-term capital inflows for several reasons. First of all, this concerns the high liquidity of the instruments used to service this capital influx. The country's economy is highly dependent on the state of global monetary and financial markets, which are extremely susceptible to various speculative price fluctuations.

Trade balance– trade balance: the difference between receipts and expenses from a country’s foreign trade transactions. A positive trade balance indicates that a country's exports exceed its imports. Accordingly, a negative balance shows the inverse ratio of the quantities of imported and exported goods.

In simple terms, trade surplus is the difference between a country's exports and imports.

What is a trade surplus?

Positive trade balance characterized by the predominance of exports of goods and services over imports and is an indicator high level demand for the country's goods on the world market, as well as sometimes about an oversupply of manufactured goods.

What is a negative trade balance?

Negative trade balance indicates widespread consumption of foreign goods. It is generally accepted that a positive balance is better than a negative balance, because in this case, the local manufacturer is supported, and therefore the country’s economy. A negative balance of foreign trade transactions can indicate an underdeveloped and uncompetitive economy. Most often, this situation leads to, which happens as a result of the lack of ability to pay for import transactions.

But this phenomenon also has positive side, namely the ability to curb inflation and maintain a high standard of living. The United States of America and Great Britain can serve as such examples.

Why does a Forex trader need a trade balance?

The trade balance indicator is one of the few indicators that can have not an indirect, but a direct, direct impact on fluctuations. This is explained as follows: the trade balance reflects a constant movement financial resources between partner countries related to the provision of certain goods and services according to the agreement.

It is worth noting the existence of one paradox, which is that the reaction of the national currency exchange rate to the trade balance report is minimal, and all due to structural and technical reasons. That is, the report is characterized by some delay. The reason for this is the time required for its preparation and execution. Therefore, exchange rate dynamics very rarely reflect the true flow of values ​​and material resources between trading partners.

Useful articles on the topic

Fortrader Suite 11, Second Floor, Sound & Vision House, Francis Rachel Str. Victoria Victoria, Mahe, Seychelles