Current account definition

A current account is the part of a country's balance of payments that records its trade in goods and services, its income from abroad, and its transfer payments with the rest of the world. It is one of the main gauges of a country's external position.

A current account surplus means a country takes in more from trade, income, and transfers than it pays out. A current account deficit means it pays more to the rest of the world than it receives over the period measured. The balance is reported alongside the capital and financial accounts, which track investment and lending flows.

This macroeconomic current account is different from a bank current account, despite the shared name. A bank current account is the everyday transaction account an individual or business uses to receive money, make payments, and withdraw cash, and it has nothing to do with a country's trade balance.