Trade Balance Definition

[MadMarketScientist 11]

The trade balance report shows a state of the nation’s economy by measuring the difference in the amounts spent on importing products into the country, and the amounts realized from exporting its products to other countries. A positive trade balance (exports > imports) is known as a trade surplus while a negative trade balance (imports> exports) is known as a trade deficit. A positive trade balance is seen as bullish for the currency of the country in focus and a negative trade balance is seen as bearish. Countries like China operate a trade surplus while the US has a trade deficit. This report gives clues to the state of sectors like the manufacturing sector and is used as an index of economic growth.