Trade deficits: what the headline leaves out

"Trade deficit" in the news usually means goods only: cars, phones, oil. But countries also sell services, earn interest and dividends on what they own abroad, and send money home. Add those up and you get the current account, the full picture of what a country earns from the rest of the world against what it pays out.

GoodsPhysical things bought and sold across borders. The figure usually quoted.

+ ServicesFinance, insurance, software, tourism, consulting, shipping. Big for the UK and US.

+ Income from abroadInterest, dividends and profits on investments, and wages. Includes the interest on government bonds.

+ TransfersMoney sent home by migrants, foreign aid, payments to international bodies.

= Current accountA deficit has to be paid for by selling assets or borrowing from abroad.

Every country, headline and full picture

What the data shows

Two countries, two answers

Every trade flow is counted twice, once by each side, and the two rarely agree: firms book trade through other countries, services are hard to see, and each statistics office uses its own sources. The partner tables above use the OECD's balanced figures, which reconcile the two sides so one country's surplus is exactly the other's deficit. Here is how far apart the countries' own reports of services trade were in .

Is a deficit bad?

A deficit is the other side of borrowing. A country that spends more than it earns abroad must sell assets or borrow to cover the gap: foreigners buy its bonds, shares, property and companies. Whether that's a problem depends on what the money pays for and whether investors keep wanting to lend.
It's saving against investment, not a scoreboard. A current-account deficit means a country invests more than it saves. That can be a sign of strength (investors want to put money there) or weakness (households and the government aren't saving).
Balances with single countries matter little. Every country runs deficits with some partners and surpluses with others. A goods deficit with China and a services surplus with Europe can add up to anything.
The US is a special case. The world wants dollars and US Treasuries as safe assets, which lets the US run large deficits paid for by foreigners buying US debt. That is why its interest payments abroad are so large on the net interest page.
Surpluses have costs too. Persistent surpluses (Germany, China, the Netherlands) can mean weak spending at home, and they rely on someone else running the matching deficit.

Method and sources

Country totals are the OECD's balance-of-payments figures for , in US dollars at market exchange rates, as each country reports them (not seasonally adjusted). % of GDP uses GDP implied by the OECD's current-account ratio. Partner tables use the OECD's balanced goods (BIMTS) and services (BaTIS) data for , the latest year they cover, so they won't match the country totals exactly. "Rest of world" is the balanced world total minus the 15 partners shown. Services by type use the same balanced data; "Other" is whatever the six named types don't cover. Spending by visitors counts as travel: a British tourist's hotel bill in Spain is a UK import of services from Spain. The four parts can differ from the current account by rounding.

An illustration built from official statistics, not a forecast or investment advice. Balance-of-payments figures are revised, sometimes substantially, for years after first publication. See also net interest by country, the government-bond part of income from abroad.