Definition: Current account
Balance of Payments, Eurostat
The current account shows flows of goods, services, income and current transfers between resident and non-resident entities. More specifically, the four main components of the current account are defined as follows:
The goods account covers general merchandise, goods for processing, repairs on goods, goods procured in ports by carriers and non-monetary gold. Exports and imports of goods are recorded on a f.o.b./f.o.b. basis, i.e. at market value at the customs frontiers of exporting economies, including charges for insurance and transport services up to the frontier of the exporting country.
The services account consists of the following items: transportation services performed by EU residents for non-EU residents, or vice versa, involving the carriage of passengers, the movement of goods, rentals of carriers with crew and related supporting and auxiliary services, travel, which includes primarily the goods and services EU travellers acquire from non-EU residents, or vice versa, and other services, which comprise those service transactions such as communication services, insurance, financial services etc.
The income account covers two types of transactions: compensation of employees paid to non-resident workers or received from non-resident employers, and investment income accrued on external financial assets and liabilities.
The current transfers account includes general government current transfers, e.g. transfers related to international co-operation between governments, payments of current taxes on income and wealth, etc., and other current transfers, e.g. workers’ remittances, insurance premiums - less service charges - and claims on non-life insurance companies.
Eurostat, News releases Euroindicators, No. 32/2009, 11 March 2009, Eurostat Press Office, Luxembourg, 2009