Trade Deficit
A country imports more goods and services than it exports.
What is Trade Deficit?
The largest component of the current account in the balance of payments. A persistent deficit means dollars flowing abroad to pay for imports. It is an economic indicator in the outline, not a verdict on economic health on its own.
Trade Deficit: a worked example
The US has run a trade deficit in most years since the 1970s.
More terms in Economics & Financial Reporting
Business Cycle
The recurring pattern of expansion, peak, contraction, and trough.
Leading, Coincident & Lagging Indicators
Data series that move before, with, or after the business cycle.
Deflation vs. Disinflation
Falling prices versus a slowing rate of price increases.
Currency Valuation & Exchange Rates
What one currency buys of another, and who wins when it moves.
Sovereign Debt
Bonds issued by a national government.
Income Statement
Revenue, expenses, and profit over a period of time.
Balance Sheet
Assets, liabilities, and equity at a single point in time.
Statement of Cash Flows
Where cash came from and where it went: operating, investing, financing.