The trade balance is an important economic indicator, one of the inputs of the GDP of countries. Its value lies in the analysis of its components and not in its absolute value, so it is necessary to know the quality of each of its components and structure. It can be said that a systematic record of commodity transactions between residents of a particular country on the one hand and those residing in the rest of the world on the other hand in a given period is a Gregorian year and is part of a larger register of exchange of services and money called the balance of payments.
Trade balance surplus when exports surpass the value of imports in the country, while trade balance deficit occurs when imports outweigh exports.
The impact of the trade balance on the economic growth:
In the case of surplus: This reflects the health of the state economy through the efficiency of production and increase the levels and quality of the local goods and services and the surplus means the country's access to foreign currency to add to its reserves of this currency to ensure the financing of imports and payment of external obligations and strengthen the status of currency in the markets And means the employment of labor without the ability to export, as long as it can be operated. It also means the continuation of building new productive capacities to expand the capacity of the country to meet its needs and increase its exports.
Trade Balance Deficit: The trade balance deficit reflects the lack of production capacity and the supply of goods and services needed by citizens within the state, which leads them to resort to such goods in other countries. In other words, the deficit in the trade balance reflects weak economic performance and a lack of industry and production of goods and services.
