3.2.2
Note

Current Account

3.2.2 Macro issues

Statement

The current account of a country is a record of all trade flows and net flows of primary and secondary income in an economy over a period of time.

Notes

The current account has three components:

  • the balance of trade — net exports of goods and services;

  • net primary income — income generated from owning cross-border financial assets (rent on foreign property, dividends on foreign shares, interest on foreign bonds), also called investment income;

  • net secondary income — current transfers across countries that are not investments, such as international donations.

For the 9570 syllabus, only the balance of trade is examinable within the current account; primary and secondary income are background concepts that may surface in case-study extracts but are not assessed in their own right. The wider record of which the current account forms part is the balance of payments.