Breakdown of International Economic Accounts

Current Account Balance

The Current Account Balance reflects the movement of goods and services between a state and the rest of the world, as well as funds transferred between countries without compensation and exchanges in labor income and capital. It is divided into four sub-balances:

• Balance of Trade (Goods): Includes the value of all goods that residents of a state purchase (imports) and market (exports) to residents of other countries.
• Balance of Services: Records the value of all services provided to or received from residents of other countries, such as tourism and transport.
• Balance of Income: Includes income from work performed by residents employed abroad temporarily, payments sent by non-residents working domestically, and investment income (dividends and interest).
• Net Current Transfers: Unilateral payments of money without compensation in return. Examples include remittances from migrants, European Union employment aid, and inheritances.

Capital Account Balance

The Capital Account Balance deals with capital transfers and the acquisition or disposal of non-financial assets. It is divided into two sub-balances:

• Transfers of Capital: Unilateral capital transfers made without receiving anything in return, such as European funds for less developed regions or agricultural subsidies. Unlike current transfers, these are specifically designated for the purchase of capital goods, particularly infrastructure.
• Acquisition or Disposal of Non-Financial Assets: Includes transactions involving land or intangible assets such as patents and trademarks.

Note: Financial assets, such as stocks, are recorded in the Financial Account Balance.

Financial Account Balance

The Financial Account Balance includes investments made by residents abroad and by non-residents within the country. It is divided into four sub-balances:

• Direct Investment: Investments made by an investor in companies or real estate.
• Portfolio Investment: Transactions in securities, such as stocks and bonds.
• Other Investments: Lending, bank deposits abroad, and deposits held by the Bank of Spain with the European Central Bank.
• Changes in Reserves: Includes the growth or decline in foreign exchange reserves resulting from transactions reflected in other balance of payments items.