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BALANCE OF PAYMENTS, SERVICES

Statistics Directorate    
French Equivalent: Balance de paiements, services

Definition:
Services is the second major category (after goods) of the current account. Services covers traditional items, such as travel and transportation and items, such as communications, financial and computer services, royalties and license fees, and many types of other business services, that are becoming increasingly important in international transactions.

Context:
Specifically, balance of payments, services comprise:

- transportation;
- travel;
- communication;
- construction services;
- insurance;
- financial services;
- computer and information services;
- royalties and license fees;
- other business services;
- personal, cultural and recreational services;
- government services n.i.e.

Both the production of, and international trade in, services differ from production and trade related to goods. International trade in goods is conducted separately from production. For example goods may be produced in one economy and subsequently delivered to residents, who may or may not be known when production occurs, of another economy. In contrast the production of a service is linked to an arrangement made, between a particular producer in one economy and a particular consumer or group of consumers in another, prior to the time this production occurs.

Thus, international trade in services is closely linked with international production of services, as the production process itself involves a resident and non-resident. Nonetheless, the boundary between goods and services is sometimes blurred; items classified as goods may include some service element, and vice versa.

Source Publication:
BPM paras. 158-168, 185,186.

Cross References:
Balance of payments, current account

Hyperlink:
http://www.imf.org/external/np/sta/bop/BOPman.pdf

Statistical Theme: Financial statistics - Balance of payments

Created on Tuesday, September 25, 2001

Last updated on Tuesday, March 26, 2013