The balance of trade is the difference between the value of exports and imports. When exports exceed imports it is recorded as a surplus while a deficit is registered when imports exceed exports.
The balance of payments covers all economic transactions between Malaysian residents and non-residents (residents of the rest of the world) in two accounts, the current account and the capital & financial account. The current account covers transactions in goods, services, income and current transfers, while the financial account record changes in the country's foreign financial assets and liabilities.
Current account shows the flows of goods, services, primary and secondary income between Malaysia residents and non-residents.
Capital account comprises of two components namely nonproduced nonfinancial assets and capital transfers.
Financial account measures Malaysia's net assets and liabilities between Malaysia and rest of the world. It is classified according to the functional categories namely direct investment, portfolio investment, financial derivative, other investment and reserve assets.
