Editing Invisible balance (section)

==Balance of payments and invisibles==
In many countries a useful distinction is drawn between the [[balance of trade]] and the [[balance of payments]].  'Balance of trade' refers to the trade of both tangible (physical) objects as well as the trade in services &ndash; collectively known as exports and imports (in other words, 'visibles plus services') &ndash; while the 'balance of payments' also includes transfers of Capital in the form of loans, investments in shares or direct investment in projects.

A nation may have a visibles balance surplus but this can be offset by a larger deficit in the invisibles balance (creating a Balance of Trade deficit overall) – if, for example, there are large payments made to foreign businesses for invisibles such as shipping or tourism. On the other hand, a Visibles Balance deficit can be offset by a strong surplus on the invisibles balance if, for example, foreign aid is being provided.

In a similar way, a nation may also have a surplus 'balance of trade' because it exports more than it imports but a negative (or deficit) 'balance of payments' because, it has a much greater shortfall in transfers of capital. And, just as easily, a deficit in the 'balance of trade' may be offset by a larger surplus in capital transfers from overseas to produce a balance of payments surplus overall.