 So, now we are going to discuss the balance of payment accounts. We have started this particular section with the introduction of gross domestic product, gross national product and national income accounts. So, this is the most important and last part of that particular discussion that is balance of payment account. In this table, I have basically mentioned different types of flows. This is the simplest form one can actually represent a country's balance of payment. One should remember that there are two types of payments, one in form of inflow and one is in form of outflow. So, this means that any payment that is coming into your country, you will use it as an inflow. And in any form, if any payment is coming out of your country, and remember, the payment that you normally have in international currencies, like US dollar for example, all these payments will be in that form that we will discuss now. So, inflows comes into any form, it is taken as a positive indication because you have actually getting money from the rest of the world, that would be your inflow. On the other side, outflow means any money, in form of dollars that is coming out of your country, that would be outflow. So, let's start it one by one, let's discuss different components. Exports of goods and services. So, remember when we read the GNP equation, we discussed open economies and we also discussed that consumption not only means the consumption of domestic commodities, but the rest of the world, the commodities that you spend on the outside, the expenses are part of the consumption. So, the GDP or GNP components will come to some extent. The first thing is, exports of goods and services. Exports means that domestically, like Pakistan, the rest of the world is sending out many things, that would be your exports in form of goods and services. On the other side, you have imports. Second, you have an entry in the balance of payment account. Import means the commodities or services that you are getting from the rest of the world from Pakistan. Now, when we export, we get dollars from the rest of the world. That means that would be your inflow. And the inflow, as I said earlier, is a positive indication. We represent exports from A, then imports. When we import in the country, the commodities that come to the country and at the same time, you have to pay for those commodities or maybe services. So, in that form, you have dollars in the country for an exchange form. So, that would be a negative for a country. As you see in Pakistan, as we discussed earlier, there is a trade deficit and you can say over exports are far less than over imports. Next thing is investment incomes. Now, we have discussed this before. The domestic people of some country invest in foreign countries. Similarly, if you look at the case of Pakistan, if you have done foreign investment, for example, you have bought shares from a foreign company or you have bought something and you have income in its reward, then that would be investment income. Now, in this case, it also has a positive impact on the balance of payments and specifically on the current account. The first five components we will read are the current account components. The fourth component in this is debt service payments. This means that the domestic debt you have taken from the rest of the world, especially from multilateral and bilateral institutions, like IMF, World Bank and Paris Club, you pay them interest payments in return for that debt. So, debt service means that the loan you have taken from the institutions in bilateral and multilateral form, you pay them debt servicing or interest payments in return for that. Once again, these payments go out from your country. That means you have this outflow. So, you will have a negative impact on the current account. Then there is something called remittances. So, net remittances and transfers. Remittances means that the people, for example, if we take the example of Pakistan, the residents here go out of Pakistan and work, and the money they are sending to the country will be called remittances. So, net remittances means that the payments that Pakistan has gone out of Pakistan, minus the payments they send us, and the rest of the world's people who come to Pakistan, if the amount that they send to their countries is minus, then they become net remittances. So, in this case, if you talk particularly about the Pakistan aspect, then you get to hear all these things in the news, that you have a large amount of imports, and for that you have to pay a lot of money, the issues of exports are often discussed. Then you have heard that the president of the government, PTIK, his major focus was on reducing this particular deficit, and to some extent, after one year, he also said that we have eliminated this deficit, that is, the deficit of the trade, where there are imports and exports. After that, we often hear in the news that the foreign remittances that our foreign people are sending us, they also talk a lot in the news. And then, once again, it is also about the debt service payment, that Pakistan has to pay so much for IMF, or some other institution like World Bank, Paris Club, and we have to pay different institutions, so you get a lot of figures in the news. So, this is the current account balance. If you look at it, it is in an equational form, in which we have given it the name F. It is shown in these five entries, which are A minus B, A here, it is exports of goods and services, B means imports of goods and services, C is investment income, which is with plus sign, debt servicing, it is outflow, that is why it has a negative sign, which is shown with D, plus E, which is showing remittances to you, and once again, positive sign. So, if you want to discuss the current account balance, you can discuss these five variables up to here. After that, the next entry, which you discuss in the capital account, in the transactions account, the first thing is direct private investments, which you are getting from the outside, that you will get from direct private investments, then you will get some positive impact, because once again, when the investment comes into your country, it will take in flow, and dollars or any international currency will come into the country and that will be a positive sign. Then, the next entry is represented by H, this is foreign loans, private plus public minus amortization. Now, if you talk about foreign loans, then our long term debts, all the debts, you will often hear in the news, that Pakistan's, I suppose, external debt has been close to 100 billion, it has crossed it. So, you have this total amount of foreign debt, we will talk about that, and minus amortization means that the principal amount which you have returned in form of debt servicing, because when you take debt, then you have interest which you have to pay, plus you also give some part of the principal amount back. So, this sign is once again positive, although this is not the right thing, which you take loans, especially the case of Pakistan, but once again, we are showing it with a positive sign, because it has a positive inflow or money coming in the country, whether it comes in the form of loans, whether it comes in the form of investment income, whether it comes in the form of remittances, so whenever money comes in any form, especially international currency, when it comes in the country, then you give it the name of inflow. After that comes the increase in foreign assets of the domestic banking system. So, the banking which you have, suppose Pakistan has banks, when they teach foreign assets, suppose you are an HBL bank, commercial bank, and they make their different branches in different countries, so once again, they will need money for that. So, they will send money from Pakistan and they will send it out in the form of dollars, and they will go out of the country. So, if you look at this too, there is a negative impact and it will come with a minus sign, then last is the resident capital outflow. Now, capital outflow is very significant for any country and in history, there are no prominent examples of different countries because of which you have to face very negative consequences. So, the capital outflow means that when the people or residents of a country move their capital in the form of foreign currency in some other country. If we talk about Pakistan, especially in the last three decades, then you will see something very prominent that many industries of Pakistan left Bangladesh from here. And in other countries where business facilities were good, in that case, you have capital outflow from Pakistan. Similarly, in Latin American countries, when the debt crisis came in the 1980s, the biggest issue there was that their capital was outflow or went out of the country. In that, many countries like Brazil are a very classical example. If you study Mexico, then this was the case there too. So, there will be a negative sign with this because once again, the capital outflow from here means that you have foreign exchange and foreign money going out. So, if we sum up the capital account balance, then you will have direct private investments that will positively contribute towards capital account balance. Then foreign loans plus minus monetization will add positively towards capital account balance. Then we have to subtract increase in foreign assets of domestic banking system. Then once again, we have to subtract resident capital outflow from this account. So, we are giving the remaining amount to K which we are talking about the capital account. Then lastly, we are talking about increase or decrease in cash reserves account. So, in any of your economy, the cash reserves account is given as L and in this balance, we gave the error omissions as M in which the existing cash reserves account you will minus F, minus current account, then minus capital account. So, this is the balance of payment at the end of the day for any country.