BPM6

Indian Economy glossary

Also called: Balance of Payments and International Investment Position Manual, Balance of Payments Manual sixth edition · Topic: Balance of Payments and Exchange Rates · NCERT: Class 12, Ch 6 "Open Economy Macroeconomics"

Meaning

BPM6 is the IMF's sixth Balance of Payments Manual, issued in 2009. Its full name is the Balance of Payments and International Investment Position Manual. It sets global rules for recording BoP data. It uses three accounts: current, capital and financial. The old "capital account" is split into two:

  • A narrow capital account, for capital transfers and non-produced, non-financial assets.
  • A financial account, for almost all trade in financial assets: FDI, portfolio investment, loans and reserves.

In the current account, BPM6 calls factor income primary income and transfers secondary income.

Example

RBI's BPM6-style current account reads: goods, services, primary income, secondary income. A foreign firm buying a stake in an Indian company goes in the financial account, not the capital account. RBI also publishes its traditional "major items" table.

Don't confuse with

  • Class 12 "capital account": NCERT uses the older, broader meaning, which puts all asset trade in the capital account. Under BPM6 most of those items belong in the financial account.

Related concepts

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