Trade balance, its role in the country's economy

Can be easily determined by its trade balance. Trade balance indicators should be called a litmus test that changes color depending on the unfavorable conditions. To monitor economic development For a particular country or group of states, it is the method of studying the trade balance that is used.

Balance of foreign trade

Each country sells its products and services to other countries and buys from them what it does not produce at home. If you sum up all the funds received from exports and count all those paid for, over a certain period of time, then the net balance will result in a reliable indicator of foreign trade, which is usually called the foreign trade balance. Transactions paid for with own or borrowed funds are taken into account here. For economic analysis Data from an individual country or group of states can be taken, depending on what goals are being pursued.

and its indicators

In economic terminology, the most commonly used word is “balance”. A positive trade balance means that a country has sold more of its goods than it bought. Conversely, a negative balance indicates the dominance of the import component in the country’s overall balance.

What’s wrong is that the country buys a lot of foreign products, industrial products, medicines, innovative technologies etc.? The fact is that the state purchases all this for the currency received from the sale of its goods. It turns out that the foreign exchange flows received through exports are not equivalent to the amounts spent on imports. That is, there is not enough currency to purchase imported goods in the required volume. To cover the deficit, the country needs to open the bins in which the strategic one is located and begin to sell it on the international foreign exchange market, and with the received currency to cover the missing funds for imports. Therefore, a negative trade balance is a serious economic signal that the economy is not developing as expected. In this case, the governments of the countries are taking emergency measures to correct the situation, which include:

in the analysis of the current situation;
in improving the quality of the entire export product;
in updating outdated technologies to innovative systems;
in search of new markets and their active monitoring.

Prompt government intervention in the economic situation almost always produces positive results.

Is a negative balance also a good thing?

The highly developed countries of Europe, America, and Asia know how to turn negative balances in their balance sheets to their advantage. This approach to business can be seen in the USA, England and Germany. A negative balance in the economy helps reduce inflation by moving some dominant industries beyond the country's external borders. But for undeveloped countries, this situation is economically more dangerous. A negative balance systematically washes away the currency available in the country, building a corridor for the depreciation of national money. There comes a time when the state cannot repay the loans taken with interest. Illustrative examples demonstrated by Greece, Ukraine and other countries that were on the verge of default.

Throughout the year, special institutes scrupulously collect and systematize the necessary data, publishing them in specialized printed publications and forms. Having studied the annual balance, economists can with a high degree of probability predict the development of national economies, taking into account all the negative factors affecting it.

Adjusting the balance of foreign trade

A complex process is the regulation of the balance of payments or trade. Both of them are characterized by extreme instability. The instability factor is caused difficult situation with a lack of finance in some states and a surplus in others. The difference in financial potential disrupts the global balance of capital, which affects the economic condition of the country. Today, regulation of the balance of payments is included in the list of main functions of financiers who are developing strategies and tactics to combat inflation and ever-growing unemployment.

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(English balance of foreign trade) - the ratio of the cost of goods imported into a country and exported from it over a certain period of time. If the cost of exported goods exceeds the cost of imported goods, then V.b. is considered active; if the relationship is reversed, it is considered passive. The difference between the value of exports and imports is called the balance, the value of which depends on fluctuations in commodity prices, exchange rates, rates of economic development, etc. Passive V.b. adversely affects the condition national economy and the foreign economic situation of the state.

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- the ratio of the cost of goods imported into a country and exported from it over a certain period of time...
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- the ratio of the cost of goods imported into the country and exported from the country over a certain period of time...
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- the ratio of the value of exports and imports of goods for a certain period of time. V. b. includes both actually paid and goods transactions carried out on credit...
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- the relationship between foreign exchange receipts and payments of a given country for a certain period, reflects all foreign economic relations...
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- FOREIGN TRADE, oh, oh. Relating to foreign trade. Foreign trade association...
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Word forms

"Foreign trade balance" in books

Balance

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Foreign trade arbitration

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Hungarian Foreign Trade Bank

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1. Balance of payments and its types. Russia's balance of payments and its external debt

From the book International economic relations: lecture notes author Ronshina Natalia Ivanovna

1. Balance of payments and its types. Russia's balance of payments and its external debt The balance of payments is the ratio between all payments that a country has made to other countries and the sum of all funds that it has received during the same time from other countries.B

The foreign trade balance is the ratio of the cost of import and export of products for a particular time period. Along with actually paid transactions, transactions carried out on credit are also included in the foreign trade balance. In case of 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 country's settlement balance.

The foreign trade balance is formed according to individual countries, and by groups of countries. The foreign trade balance is called active if the cost of exported goods exceeds the cost of imported ones. In the case when the cost of imported goods exceeds the cost of exported goods, the foreign trade balance is passive.

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

The difference between the value of imported goods and exported products is called the balance. Trade balance - annual figure (in some cases - quarterly) foreign trade transactions countries.

A positive balance (or a decrease in the 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 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 occurred, in addition, the movement of capital due to trade relations, several times less than the movement of capital associated with the work of credit and stock markets, and the cycles of these two threads usually do not coincide. As the foreign trade deficit grows, the demand for foreign currency increases and the exchange rate of the local currency 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 overall balance is a 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 inventories, which may indicate a possible subsequent slow increase in sales.

Subsequently, specific product groups are analyzed. There are several special exports and imports that can significantly affect the trade balance. For example, oil for imports (especially the increase in its price) and aviation for exports. Depending on the commodity category, a widening deficit created by a small drop in exports could push fixed income markets in either 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 downturns in net exports, other indicators can either improve or worsen. The main reason is the different synchronization of business cycles at home and abroad, as well as the duration of cycle changes at home and abroad. Exports show consistent growth during the expansion phase of a country's business cycles, but this relationship again breaks down during recessions and recoveries.

The purpose of this article is to study the theoretical aspects of the trade balance, its role, main items and factors influencing it. To achieve this goal, it is necessary to solve the following tasks: - consider the concept and essence of the trade balance; - study its main features.

Improving the formation of a capital repair fund in apartment buildings
Regulatory and legal regulation of issues of assessing the quality of provided state (municipal) services in Russia

The relevance of this topic cannot be exaggerated, since the trade balance is a mirror reflection of the economic state of the country. modern conditions It is difficult to predict or actively participate in the international monetary and financial system without taking into account the role of the country's trade balance.

The purpose of this article is to study the theoretical aspects of the trade balance, its role, main items and factors influencing it.

To achieve this goal, it is necessary to solve the following tasks:

consider the concept and essence of the trade balance;
study its main features

Trade balance(Trade Balance, TB) - part of the balance of payments that characterizes the country’s trade relations with other states. Its components are the export and import of goods. The trade balance is the difference between the amount of exports and the amount of imports of a country's goods. The trade balance characterizes, first of all, the competitiveness of a country's goods abroad. The predominance of exports over imports (positive trade balance) indicates that there is an influx of foreign currency into the country, and the exchange rate of the national currency rises. Conversely, the predominance of imports over exports (negative balance or trade deficit) means low competitiveness of the country’s goods abroad. (1, p.3)

The beginning of the emergence of the concept of “balance of payments”, according to its modern understanding, can be considered the appearance of the term “balance of trade”. It was first used by Edward Misselden in his treatise “The Circle of Trade” (1623), where the first calculations of the balance of trade for England for 1621 were made.

The concept of “trade balance” is further developed in the works of Thomas Mann. In the book “The Wealth of England in Foreign Trade” (1664), the author introduces the concept of “general balance of trade.” T. Mann notes that deficits in foreign trade with some countries can be compensated by a positive balance with other countries, therefore the assessment of foreign trade activity should be carried out on the basis of the overall trade balance.

The term " payment balance"was first used by the English economist, one of the largest representatives of late mercantilism (from Italian mercante - merchant, merchant), the first school of bourgeois political economy) James Stuart (1712-80). In his work "Inquiries into the Principles of Political Economy" (1767), he was the first to point out and examine in detail the relationship between foreign trade and the movement of capital. D. Stewart defines the balance of payments as an independent concept, which consists of (7, p. 57):

Expenses of citizens abroad.
Payments of debts, principal and interest to foreigners.
Providing cash loans to other countries.

The role of the trade balance in the Russian economy

In Russia, a positive trade balance has been observed throughout the entire history of statistics. The attitude towards a country’s trade balance surplus or deficit depends on a number of factors that determine the position of this country in the world economy, characteristics business connections with partners, characteristics and specific gravity main items of the trade balance, etc.

Thus, the attitude towards a positive trade balance in Russia is quite contradictory. Despite the increasing gap between exports over imports, forming a positive trade balance, quality characteristics This surplus has been a source of concern for economists for at least a decade.

The main source of surplus and the main export item are natural resources actively exported from Russia. And specific export growth natural resources shows growth dynamics throughout the entire time statistical observation. As we can see, quantitative growth in exports has been observed throughout the last decade. The fall in exports and imports of goods in monetary terms in 2009 was due to the active phase of the global financial and economic crisis, but within 2 years the fall was recouped, and trade indicators at the end of 2011 reached record levels. It is also worth paying attention to the fact that, as such, the export of natural resources did not fall quantitatively during the crisis. (paraphrase of source 2, p. 15)

Conclusion

In conclusion, it should be noted that the trade balance is one of the main tools for macroeconomic analysis and forecasting.

Trade balance is the relationship between the sum of prices of goods exported by a country or group of countries and the sum of prices of goods imported by them for a certain period of time, for example, for a year, quarter, month. In other words, the trade balance is the exports and imports of a country for a certain period or date.

If the cost of exporting a country's goods exceeds the cost of importing them, then the trade balance is active. If the cost of imports exceeds the cost of exports, then such a trade balance is passive. If the cost of export and import coincides, a net balance is formed. A country with a passive trade balance must cover the deficit by spending various balance of payments receipts, in particular income from the transportation of foreign goods on its means of transport or through its territory, interest and dividends from capital investments abroad, the influx of foreign capital, foreign loans, the use of reserves foreign currencies and gold exports. A trade surplus largely characterizes the favorable economic position of a given country and is one of the important indicators of the degree of dependence of its economy on foreign markets, on the state of the market, international competition, as well as political dependence on other states.

Balance of payments data reflects how trade with other countries developed during the reporting period, which directly affects the level of production, employment and consumption, how much income was received from non-residents and how much was paid to them. These data make it possible to trace the form in which foreign investment was attracted, whether the country's external debt was repaid on time or there were arrears and its restructuring, as well as how residents invested in the economies of other countries, how the Central Bank eliminated payment imbalances by increasing or decreasing its foreign currency reserves.

The balance of payments is actively used to determine fiscal and monetary policies, protectionist measures, as well as when making decisions on regulating the domestic foreign exchange market and the exchange rate. Based on the results of the balance of payments, further decisions are made in the field economic policy countries.

A distinctive feature of Russia from other countries with transitive economies is its enormous resource potential, which allows it to maintain an active current account balance, mainly due to a positive trade balance.

For Russia, financing the capital account deficit of the balance of payments is more relevant than the financing of the current account balance. However, this cannot be called a plus for the economy, since the positive current account balance is a reflection of the low investment attractiveness Russia.

Bibliography

Litvintsev N.N. Trade balance. Textbook edited by Litvintsev, 1st edition, 2010.240 p.
Aleksashenko S. The landslide is over, the crisis continues // Questions of Economics. 2009. - No. 5. - P. 4 - 20.
Buglai V. B., Litvintsev N. N. International economic relations: Textbook. allowance/Ed. Litvintseva N.N. - 2nd ed. - M.: Finance and Statistics, 2008. - 160 p.
Bulletin of the Bank of Russia. 2012. - No. 48 - 49.
Zhuravlev S. Stopping without a requirement // Expert. 2012. - No. 2. - P. 28 - 33.
Ivashevsky S. N. Macroeconomics.—Moscow, 2010
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