The calculation involves determining the difference between a nation’s total value of exported goods and services and its total value of imported goods and services over a specific period. This calculation yields a figure that represents the trade balance. For instance, if a country exports $500 billion worth of goods and services but imports $400 billion, the resulting figure is $100 billion.
This figure is a crucial indicator of a country’s economic health and trade competitiveness. A positive figure, indicating a trade surplus, suggests that a nation is selling more than it is buying from the global market. Conversely, a negative figure, indicating a trade deficit, suggests the opposite. Historical analysis of these figures provides valuable insights into a nation’s evolving trade patterns and their impact on overall economic growth.
