ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Investment by a Japanese car manufacturer in a factory in the UK
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A loan from the IMF to the UK
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Spending by Chinese tourists in London
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The transfer of profits from Cadbury UK to its US parent company, Kraft Foods
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Detailed explanation-1: -What’s in the bulletin? The value of goods imports decreased by £4.9 billion (8.7%) in January 2023; after removing the effect of inflation, imports of goods fell by £4.1 billion (9.3%). Goods imports from the EU fell by £2.5 billion (8.8%) and those from non-EU countries fell by £2.4 billion (8.7%) in January 2023.
Detailed explanation-2: -There is a roughly $200 billion gap between the goods surplus China reports in the balance of payments and the goods surplus Chinese customs reports to the world. This amount accounts for over a percent of Chinese GDP. Now, there are reasons why the balance of payments data can differ from the customs data.
Detailed explanation-3: -United Kingdom Current Account Balance United Kingdom Current Account recorded a deficit of 22.8 USD bn in Sep 2022, compared with a deficit of 44.1 USD bn in the previous quarter. UK Current Account Balance: USD mn data is updated quarterly, available from Mar 1957 to Sep 2022, with an averaged value of-1.5 USD bn.
Detailed explanation-4: -In simple terms, this means that the UK government has been borrowing to cover the difference between its outgoings and its tax revenues – the fiscal deficit. The current account deficit indicates that the UK economy as a whole is borrowing from the rest of the world.