Balance of Trade and Current Account

Balance of Trade
The balance of trade is the value of exports of goods and services less imports of goods and services. It is usually the largest component of the current account.

Current Account
The current account covers all transactions (other than those in financial items) that involve economic values and occur between resident and non-resident entities. It also covers offsets to current economic values provided or acquired without a quid pro quo. Specifically, the major classifications are goods and services, income, and current transfers. If the current account is positive, the country is a net lender to the rest of the world, while for a negative current account the country is a net borrower. Hence, the current account provides a useful indication on the level of international competitiveness of a country. The current account makes up the country's Balance of Payment together with the capital and financial account.