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Benefits of keeping an accurate BOP record - Coggle Diagram
Benefits of keeping an accurate BOP record
economic health indicator
providing insights into the overall economic activity, including trade, investment, and financial flows
Early warning system
country is needing to buy more abroad than it is able to sell other demonstrating declining competitiveness or excessive borrowing, prompting policy interventions
Policy guidance
helps shape monterary and fiscal policies
Business partner assesment
BOP helps assess the viability of entering new market or forming partnerships by indicating the country's ability to engage in international trade
International competitiveness
by analyzing trade balance and capital flows, stakeholders can gauge how competitive a country is relative to others and identify areas of improvement
Currency valuation
surplus can lead to appreciation, while deficit can lead to depreciation affecting international purchasing power and trade dynamics
Investment opportunties
evaluate market potential and economic stability
Resource allocation
when there is a disequilibrium prompt adjustment in resource allocation leading to more efficient use of resources, benefitting both the individual country and global economy
Economic growth potential
facilitate economic growth by allowing countries to invest more than their domestic saving would permit
Global economic integration
how integrated a country is winth in global economy by highlighting strengths and weaknesses in international transaction, helping policymakers and businesses understand their global stance