In the balance of payments statement, a current account deﬁcit is always matched by a capital and
ﬁnancial accounts surplus.

Question

Quizplus · Accepted Answer

This is known as the balance of payments identity. In other words, a country's current account deficit (when it imports more than it exports) must be financed by a capital and financial account surplus (investment from foreign sources). Therefore, the sum of the current account, capital account, and financial account must always equal zero.

In the Balance of Payments Statement, a Current Account Deﬁcit