Abstract

66. The BPM broadly defines the balance of payments as recording (a) transactions—which take place between an economy and the rest of the world—in goods, services, and income and (b) changes of ownership in that economy’s monetary gold, special drawing rights (SDRs), and claims on/liabilities to the rest of the world. It is therefore essential to know how an economy is defined for BOP purposes. In chapter 2 of the BPM, the economic territory of a country is defined as a geographic territory administered by a government within which persons, goods, and capital circulate freely. For maritime countries, geographic territory includes any islands subject to the same fiscal and monetary authorities as the mainland. This concept is elaborated in chapter 4 of the BPM, which states that the economic territory of a country includes: