Topics

Concept

Label
Current Account
Description

Records the value of New Zealand’s transactions with the rest of the world in goods, services, primary income, and secondary income.

The credit side of this account shows the export of goods and services, income earned, and, under secondary income, the offsetting entries to resources received by residents without payment being required.

The debit side shows the import of goods and services, income paid, and, under secondary income, the offsetting entries to resources supplied to foreign residents without payment being required.

The current account balance is the sum of all current account credits less all current account debits. When the sum of debits is greater than the sum of credits we have a current account deficit. In New Zealand's case, the current account balance is usually in deficit; that is, expenses exceed revenues. Current account balances (deficit or surplus) are financed through the financial account.