Merchandise trade constitutes the major item in the current account of the balance of payments of most countries. However, other items have become increasingly more important in recent years. These items are rather heterogeneous and do not easily lend themselves to neat conceptual and analytical treatment. Consequently, there exists considerable confusion and ambiguity regarding the components of current transactions in the non-merchandise account and in analysing the factors determining the levels and rates of change of such trade. The rubric “services” is often used to cover such diverse elements as shipping, freight and insurance, tourism, investment income and interest payments, as well as workers’ remittances and other unrequited private transfers. Recently payments for royalties, and technological and data services, which are lumped together as “other services”, have assumed considerable importance as essential imports of many developing countries.

Related Subject(s): Economic and Social Development
Sustainable Development Goals:
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