Market importance: High importance.
Meaning: A broader measure of international trade and investment than the trade account.
Release time: Two and a half months after the end of the quarter, 8:30 a.m. Eastern Time.
Coverage period: The most recent quarter.
Revision situation: Generally revised appropriately.
The current account is the main item on a country’s balance of payments, which records the inflows and outflows of funds generated by a country and foreign countries due to goods, services, investment income, other goods and services income, and other factors.
If the balance is positive (surplus), it means that the country’s net foreign wealth or net foreign investment increases. If it is negative (deficit), it means that the country’s net foreign wealth or investment decreases.
The current account generally includes five major items:
(1) Goods, which are the imports and exports of goods of a country.
(2) Services, including transportation and insurance fees related to goods imports and exports, passenger fares and port fees, and the income and expenditure of domestic residents traveling and sightseeing abroad and foreigners traveling and sightseeing in the country.
(3) Investment income, which refers to the dividends or interest earned by nationals from purchasing foreign stocks, bonds, and other assets, plus the interest and dividend expenses generated by domestic borrowing from abroad or foreign investment in the country.
(4) Other goods, services, and income, which refer to the transactions of residents and non-residents related to services and income that have not been included before, embassy expenses, and remuneration for residents working abroad, expenses of various institutions of foreign governments or international organizations in the country, etc. The so-called trade balance generally refers to the sum of the four items mentioned above.
(5) Unilateral transfers, which refer to cash or in-kind donations, relief, foreign aid from a country, and the apportionment of funds to international organizations.