Balance of PaymentsGerman balance of paymentAustralian balance of payment Balance of Payments (BOP)A statement of all transactions between one country and the rest of the world during a given period; a record of flow of goods, service, and investments across borders.It is a type of measurement.Usage of Balance of Payments Government policy makersEvaluate General competitiveness of domestic industryTo set exchange rate or interest rate policies / goalsMany other purposes Usage of Balance of Payments Individual and businessesGauge the growth and health of specific type of trade or financial transaction by country and region of world against the home country.

Examples of International Economic Transaction counted in BOPPakistan imports of Honda Automobile which were manufactured in Japan.A Pakistani based firm is hired to manage the labor services in the Middle East.A U.S. subsidiary of French firm pays profits (dividends) back to the parent firm in Paris.A foreign tourist purchases hand made items in Pakistan.A U.S. Government provides grant financing of military equipment for NATO.A Pakistani dentist purchases a U.S. Treasury bill through an investment broker. Major Sub Accounts of BOPCurrent AccountAn account in the BOP statement that records the result of transection involving merchandise, services and unilateral transfer between countries.Financial AccountAn account in the BOP statement that records transactions involving borrowing, lending and investing across borders. Net Error and Omission AccountMake sure the balance of payments actually balances (to adjust errors and statistical discrepancies) Current AccountCurrent Account includes all the international economic transactions with income or payment flows occurring within the year, the current period.Four categoriesGoods Trade (Merchandising)Service Trade (banks, airline, construction services)IncomeIncome associated with investment that was made in the previous period (dividend)Wages salary paid to non resident workers.Current TransfersAny transfer between countries that is one way, a gift, or a grant.U.S. Government aid for the development of less developed nations.

The Structure of Current Account

The Capital and Financial Accounts Measure all international economic transaction of financial assetsThe capital accountThe capital account is made up of transfer of financial assets and the acquisition and disposal of non-produced / nonfinancial assets.The financial accountDirect InvestmentPortfolio InvestmentFinancial derivatives Other investment assets / liabilities The Financial AccountDirect InvestmentThat is the net balance of capital dispersed out of and into the domestic country for the purpose of exerting control over assets.Portfolio InvestmentsThe net balance of capital that flows in and out of the domestic country but doesnt reach the 10% ownership threshold of direct investment. (e.g. debt securities)The Financial AccountFinancial Derivatives That are financial instruments that are linked to a specific financial instruments, indicators, or commoditythe instruments underlying assets.Other Investments Assets / LiabilitiesVarious long term and short term credits, cross border loans, currency deposits, bank deposits and other account receivable and payable related to cross border trade.Types of Business TransactionReal assets:The exchange of goods and servicesThe exchange of good for other goods or services (barter)Common types of payment, money.Financial assets:The exchange of financial claims ( stocks, bonds, loans) in exchange for other financial claims or money.

German Balance of PaymentsDeutsche Bundesbank monthly report march 2014Germany: Map & Flag

Some FactsGermany: Country in Europe.Federal Republic of Germany, is a Federal Parliamentary Republic in Western Central EuropeCapital: BerlinPopulation: 80.63 million (2013) world bankOfficial Language: GermanCurrencyOld national Currency Name : Deutschmark or MarkNow Germany is a member of European Union also member of European Monetary Union adopted Euro() as its currency in 1999 (2001).

Present ConditionCurrent account surplus of 206 billions in 2013Year -0n- year rise of 7.5 billions ReasonsEconomic up turn in GermanyNet Capital export in 2013 were high ( 250.5 billions)German portfolio investment in other countriesGermany BOP Account AnalysisCurrent AccountAs a %age of GDP

Current account balance Components: Trade in goods1 Services excluding travel Travel Income Current transfers + 12 + 10 + 8 + 6 + 4 + 2 0 2 4 6 Overall Enlarged scale of which +6 +5 +4 +3 +2 + 1 0 1 2 3 With the euro-area countries 1999 00 05 10 2013 Underlying TrendsGerman economys current account surplusInternational economics conditionCalmar mood in financial Market.Year on- year Growth 7.5 billions Underlying Trends2012 growth (+ 20 billions)ReasonsEuro are Sovereign debt crisis 2009Euro are uncertainly and strong position of GermanyDemands of German GoodsIncreased exportUnderlying Trends2013 increase in importReasonsPostponed investment projects due to euro-area debt crisisOverall improvement in economy of the world lessened the demand or Germans goods.Import increasedBut impact of overall price decrease of commoditiesUnderlying TrendsIncome Increasingly sizeable surplus linked to expansion in net external assetsReporting year is significantGerman enterprises in the international transport and logistic business and as providers of IT services and technical and financial services are also in demand outside of GermanyGermanys foreign trade within and outside the Euro Area

billion Goods exports 700 600 500 400 300 200 100 0 600 To euro-area countries To non-euro-area countries Goods imports 500 400 300 200 100 0 Enlarged scale 120 90 Foreign trade balance 60 30 0 2007 2008 2009 2010 2011 2012 2013 Foreign Trade By RegionsExportsVolume of goods delivered to the euro area contractedExport to non euro area market recorded increase only for a few countries during 2013While 2011 & 2012 recorded very high rate of growthExport to Ireland expandedDemand for German goods decreased in 2 large countries (France & Italy)Foreign Trade By RegionsExportsExport jump, pharmaceutical productsGermans expending industries intermediate goods for central and east European countriesHigher sale were recorded in particular, for computer electronic and optical products and electrical equipment.Foreign trade by selected categories of goods in 2013

Foreign trade by selected categories of goods in 2013 Exports Agricultural goods 1.0%Unclassifiable goods 2.7%Energy 2.8% Intermediate goods Consumer 31.5% goods 17.2% Imports Agricultural goods 3.4% Unclassifiable goods 2.2% Intermediate goods 30.4% Energy 14.8% of which Motor vehicles 17.5% Consumer goods 20.2% of which Motor vehicles 9.4% Capital goods 29.1% Capital goods 44.7% Source of unadjusted figures: Federal Statistical Office. Deviations from 100% due to rounding. Deutsche Bundesbank Significant DifferencesEnergyCapital GoodsMotor VehiclesNote able differenceAgricultural goods

Foreign Trade by Region

Per- cent- age share 2013 Country/ roup of countries Exports Euro area (17) Other EU countries of which United Kingdom Central and east European EU countries (8)1 Switzerland Russia USA Japan Newly industrialised economies in Asia2 China South and east Asian emerging market economies3 OPEC All countries Annual percentage change 2011 2012 2013 36.8 20.2 8.4 13.3 3.4 3.3 1.0 2.0 6.9 11.8 11.8 3.3 9.9 4.3 3.3 8.1 1.6 3.0 6.1 15.5 14.9 30.8 12.5 15.0 8.8 20.6 0.1 2.2 10.6 17.9 13.4 4.5 2.9 1.5 3.3 5.2 1.6 0.1 2.2 0.4 2.3 2.8 100.0 12.3 2.0 11.5 11.7 18.3 3.3 6.2 3.5 0.2

Per- cent- ageshare 2013 Country/ group of countries Imports Euro area (17) Other EU countries of which United Kingdom Central and east European EU countries (8)1 Switzerland Russia USA Japan Newly industrialised economies in Asia2 China South and east Asian emerging market economies3 OPEC All countries Annual percentage change 2011 20122013 37.7 18.2 12.7 15.8 0.0 1.1 1.6 3.1 4.8 18.0 4.3 1.3 10.5 4.1 4.0 5.7 2.8 3.0 9.7 15.9 13.8 28.4 7.3 5.0 4.5 2.9 1.4 2.1 4.6 5.2 7.1 6.0 1.3 5.4 1.1 5.5 5.0 11.0 3.8 6.6 3.1 1.2 100.0 13.8 42.8 13.2 0.5 28.5 0.4 1.2 7.0 1.1 1 Bulgaria, Croatia, Czech Republic, Hungary, Latvia, Lithuania, Poland, Romania. 2 Hong Kong, Singapore, South Korea, Taiwan. 3 India, Indonesia, Malaysia, Philippines, Thailand, Vietnam. Deutsche Bundesbank Major Items of the Balance of Payment

Item I Current account 1 Foreign trade1 Exports (fob) Imports (cif) Balance 1,061.2 902.5 + 158.7 1,095.8 905.9 + 189.8 1,093.8 896.2 + 197.7 2011 r 2012 r 2013 r Supplementary trade items2 2 Services (balance) of which Travel (balance) 3 Income (balance) of which Investment income (balance) 4 Current transfers (balance) 20.3 + 3.4 33.2 + 3.3 29.0 + 2.4 33.8 + 70.5 33.6 + 76.4 33.6 + 76.9 + 68.7 + 73.8 + 74.8 33.9 37.7 -42..0

Balance on current account + 178.4 + 198.6 + 206.0 II Balance of capital transfers3 + 0.6 + 0.0 + 1.8 III Financial account4 1 Direct investment 2 Portfolio investment 3 Financial derivatives 4 Other investment5 5 Change in the reserve assets at transaction values (increase: )6 Balance on financial account 15.6 + 28.0 27.7 156.5 51.7 64.7 16.3 88.7 23.2 165.0 16.1 45.5 2.8 1.3 0.8 174.7 222.7 250.6 IV Errors and omissions 4.3 + 24.1 + 42.8 1 Special trade according to the official foreign trade statistics (source: Federal Statistical Office). 2 Including warehouse trans- actions for the account of residents and the deduction of goods returned. 3 Including the acquisition/disposal of nonproduced non-financial assets. 4 Net capital exports: . For details see the table Financial transactions on p 45. 5 Includes financial and trade credits, bank deposits and other assets. 6 Excluding alloca- tion of SDRs and excluding changes due to value adjustments.

ItemAustralia Balance of Payments Australia: Map & Flag

Some FactsWorld 6th Largest Country By AreaCapital: CanberraCurrency: Australian Dollar ($)Total Population: 2377540052nd Most Populous CountryCurrent Account Balances (Sep Qtr. 2014)

Goods and Services (Sep Qtr. 2014)

Net International Investment Positon (Sep Qtr. 2014)

Balance on Current Account (Sep Qtr. 2014)

Current Account Balances (Dec Qtr. 2014)

Goods and Services (Dec Qtr. 2014)

Net International Investment Positon (Dec Qtr. 2014)

Balance on Current Account (Dec Qtr. 2014)

AnalysisBalance of PaymentsIn the December quarter 2014, the current account deficit narrowed by 21.0 per cent from $12.1B in the Septemberquarter 2014 to $9.6B in the Decemberquarter2014 (Chart1).Goods and ServicesThe net goods and services trade balance improved from a trade deficit of $3.9B in September 2014 to a trade deficit of $2.4B in December 2014 (Chart2). AnalysisIncomeThe net income deficit narrowed from $8.2B in the September quarter 2014 to $7.2B in the December quarter 2014.Australias Net Investment PositionIn annual terms, the net investment position increased by 3.4 per cent to $866.1B in the December quarter 2014 (Chart3). AnalysisAustralias Balance of PaymentsThe net income deficit narrowed from $8.2B in the September quarter 2014 to $7.2B in the December quarter 2014.Australias Net Investment PositionIn original terms in 2014, Australia's balance of payments deficit narrowed by 13.6 per cent ($7.0B) to $44.7B.Australia's Current Account Since 1959

Contribution of Goods And Services

Historical Analysis of Balance of Payment of Australia In trade terms, the Australian Economyhas had persistently large current Account deficitsfor more than 50 years.

Factors contributing to high C.A. DeficitNarrow export baseLack of competitiveness Having reliance on capital goods from overseasLow level of international savingLot of businesses seek funds oversees

Effects of Current Account DeficitLow Investor ConfidencePossibilities of Currency crises and central bank macro economic policiesLow Investment and low expenditure restrain the current account from growing.Thank You.