What is the foreign trade balance. How is a country's trade balance measured? Foreign Trade Turnover Formula

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

In simple terms, the trade balance 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 of a high level of demand for the country's goods on the world market, as well as sometimes an oversupply of goods produced.

What is a negative trade balance?

Negative trade balance indicates the widespread consumption of foreign goods. It is generally accepted that a positive balance is better than a negative one, because. in this case, the local producer is supported, and hence the country's economy. It is precisely the negative balance of foreign trade operations that can speak of an underdeveloped and uncompetitive economy. Most often, this situation leads to what happens as a result of the inability to pay for import transactions.

But this phenomenon also has a positive side, namely the possibility of curbing inflation and maintaining 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 trading balance?

The trade balance indicator is one of the few indicators that can have a direct, not indirect, effect 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 in accordance with the contract.

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

Historically, foreign trade is the initial form. With its help, all national economies are linked into a single world economy. determines the division of labor between countries, which with the development economic relations more and more improved and deepened.

Indicators play an important role foreign trade which includes the trade balance, receipts and payments for services, income from foreign investment, non-commercial payments, foreign exchange reserves, the movement of short-term and long-term capital.

The trade balance is determined by the ratio of exports and imports of goods. Due to the fact that the bulk is produced on credit, there are some differences between the indicators of trade produced during the relevant period and actual receipts and payments.

Economic importance the trade deficit or asset balance of a particular country depends on its place in the economic policy and the nature of its relations with partner countries. For states that lag behind the leaders in terms of economic development, the active trade balance becomes a source of foreign exchange earnings to pay for obligations to other countries and other items in the balance of payments.

Some advanced industrial countries are using surpluses to create a second economy overseas. A passive trade balance is considered an undesirable phenomenon; this characteristic is a sign of a weak foreign economic position of the state. A passive balance is inherent in developing or backward countries that lack foreign exchange earnings. This is important for industrial

Of course, a decline in exports as a result of a decrease in demand for the goods and services of one country in other states is a bad sign. However, if a negative trade balance occurs, for example, with an increase in the import of investment products, resulting in an increase in domestic production, then in this case a negative balance is not a reason for a negative assessment of the country's economic condition.

Thus, the deficit or surplus of the trade balance is estimated only on the basis of an analysis of the circumstances leading to such a result. For example, the formed positive balance in the trade balance Russian Federation is not a basis for an optimistic assessment of this situation. Due to the fact that the main export article of Russia is natural resources, raw materials, and not goods, are mainly exported from the country, we can talk about the low level of state production and the not the best state of the economy.

If the negative balance increases, then the trade balance worsens. This indicates that the country abroad is spending more money than it is receiving, as a result of foreign exchange market there is an increase in the supply of national currency from the side of trade participants, and the demand for foreign money is growing. In this case, conditions are created for the emergence of trends towards a depreciation of the own currency. And, in the opposite case, with a positive trade balance, there are tendencies to increase the exchange rate of the national currency.

It is obvious that as a result of devaluation, the depreciation of the own currency, the activities of exporters are stimulated, and imports become less profitable. Thanks to this change in the exchange rate, prerequisites are created for an increase in export operations and a reduction in imports. As a result, there is a decrease in the negative and the emergence of a positive trade balance.

The foreign trade balance is the ratio of the value of import and export of products for a particular time period. The foreign trade balance, along with actually paid transactions, also includes transactions made on credit. With actually paid commodity transactions, the foreign trade balance is part of the state's balance of payments. When transactions are carried out on credit, the foreign trade balance is included in the settlement balance of the country.

The foreign trade balance is formed both for individual countries and for groups of countries. The foreign trade balance is called active if the value of exported goods exceeds the value of imported ones. In the case when the value of imported goods exceeds the value of exported goods, the foreign trade balance is passive.

A positive foreign trade balance indicates the demand for the goods of a particular country in the markets of the world or that the state does not consume all the goods it produces. A negative balance indicates that in addition to its own goods, foreign goods are also consumed in the country.

The difference between the cost of imported goods and exported products is called the balance. The trade balance is an annual indicator (in some cases - quarterly) of the country's foreign trade transactions.

A positive balance (or a decrease in the size of a negative balance) is a favorable factor for the growth of the national currency.

The foreign trade balance is one of the few indicators that has not an indirect, but a direct impact on the exchange rate, since it reflects the movement of funds between countries for the goods and services provided. However, the paradox is that the reaction of the exchange rate to this report is minimal due to technical and structural reasons, namely: the report is too late from the time when the real movement of values ​​took place, in addition, the movement of capital, due to trade relations, is somewhat times less than the movement of capital associated with the work of credit and stock markets, and the cycles of these two flows, as a rule, do not coincide. With an increase in the foreign trade deficit, the demand for foreign currency increases and the local currency exchange rate falls. The foreign trade balance is influenced by indicators of domestic demand, since they determine the dynamics of imports, as well as the exchange rate itself, which adjusts the nominal value of import receipts in local currency.

For foreign exchange markets, the total balance is key indicator. At the beginning, exports are analyzed, because. it has a direct impact on the value of growth in the economy. Imports reflect the demand for goods in a country. The increase in imports reflects the formation of stocks, which may indicate a possible subsequent slow increase in sales.

In the following, specific commodity groups. There are several special exports and imports that can significantly affect the trade balance. For example, oil in terms of imports (especially the increase in its price) and aviation in terms of exports. Depending on product categories, a growing shortage formed by a small drop in exports could push markets fixed income in any direction. Unlike other sectors of the economy, there is no consistent relationship between the foreign trade balance and the phases of the business cycle. During recessions in net exports, other indicators may either improve or worsen. The main reason is the different synchronization of business cycles in the country and abroad, as well as the duration of the cycle changes in the country and abroad. Exports show consistent growth during the expansion phase of the country's business cycles, but this relationship is broken again during recessions and recovery.

What's happened foreign trade balance (trade balance)What is foreign trade balance... More?

Trade balance country is the difference between the value of exports and the value of imports over a given period of time.

If the value of goods imported into a country exceeds the value of goods exported (negative balance), the country is said to have a "trade deficit". In the opposite situation (the balance is positive), there is a surplus.

The balance of trade is part of a country's overall balance of payments, which is the difference between all of a country's savings and its investment.

It is also called "foreign trade balance", "commercial balance" and "net exports".

How do trade deficits and surpluses affect the economy?

A trade deficit is not always a negative factor. For example, with the development of the country's economy, an increase in imports can provide demand for goods and services or cause increased price competition.

However, during a recession, countries tend to increase their exports in order to create domestic jobs and stimulate demand for goods and services. own production. In such a situation, the trade deficit will adversely affect the economy as a whole.

Similarly, trade surpluses are not always good for the economy. A surplus may mean that a country is not using its resources efficiently enough; free funds that she could direct to improve her well-being.

In times of economic downturn, developing countries especially need to create a positive balance (surplus). This is usually because they have to pay higher import prices for finished goods and export raw materials at low prices.

Trade deficit shows the excess of imports in relation to exports, that is, it means that the country consumes more foreign goods than it exports its own.

What does a trade deficit mean?

More often negative trade balance is perceived negatively, however, in countries with an import orientation, for example, in the USA or England, this state of affairs rather indicates that the labor-intensive and hazardous industries of these states are moved beyond its borders. This approach allows maintaining a high standard of living and normal inflation in the country.

For understanding, it is worth paying attention to the composition as a whole. If the state specializes in raw materials, then it is quite possible that the trade balance will be in deficit, since it independently provides itself with everything necessary, while exporting a minimum amount of goods. Such a state imports mainly, industrial products, which is higher in cost than food and other goods.

How does the publication of data on the trade deficit affect the exchange rate?

Trade deficit is an important indicator of the state of the country's economy, which is why investors constantly monitor reports on its condition.

A positive balance (or a decrease in the size of a negative balance) is a favorable factor for the growth of the national currency. A slight trade deficit is commonplace for countries with stable economies, and may occur from time to time without harming the development of the economy. However, long periods of imbalance between exports and imports can create significant economic stress. At the same time, a prolonged trade deficit can also weaken the country's national currency in the Forex market.