Trade surplus

When a country's exports exceed its imports, it is said to have a positive balance of trade, or trade surplus.

When a country's exports exceed its imports, it is said to have a positive balance of trade, or trade surplus. The balance of trade is simply a country's exports minus its imports. The opposite of a trade surplus is, therefore, a trade deficit.

The balance of trade can be caused by several factors, including exchange rates, trade agreements, or the price of goods manufactured at home. For example, China's trade surplus with the United States has been increasing mainly because China prevents any substantial increase in the value of its currency. As a result, US imports from China are many times the value of US exports to China.




Real exchange rate

The real exchange rate between two currencies combines the nominal exchange rate with the ratio of the price of goods or services in two different cou…
26 Jun 2020

ESG investing

ESG stands for environmental, social and corporate governance, the areas in which good behaviour is particularly sought.
19 Jun 2020

FAANG stocks

The acronym FAANG refers to Facebook, Amazon, Apple, Netflix and Google (Alphabet) – five American companies that have been among the top-performing s…
12 Jun 2020

Technical analysis

Technical analysts or 'chartists' attempt to predict future share price (or index) movements by looking at past movements.
5 Jun 2020

Most Popular


House price crash: UK property prices are falling – so where next?

With UK property prices falling for the first time in eight years, are we about to see a house price crash? John Stepek looks at what’s behind the sli…
2 Jul 2020

The end of the bond bull market and the return of inflation

Central bank stimulus, surging post-lockdown demand and the end of the 40-year bond bull market. It all points to inflation, says John Stepek. Here’s …
30 Jun 2020

How can markets hit new record highs when the economy is in such a mess?

Despite the world being in the midst of a global pandemic, America's Nasdaq stock index just hit an all-time high. And it's not the only index on a bu…
3 Jul 2020