Difference between Current Account Deficit and Balance of Payments

Balance of Payment:

It reflects the way in which economic interaction takes place between one nation to rest of the world. Balance of payments is one of the major indicators of a country status in international trade. It reflects all payments and liabilities to foreigners  and all payments and obligations received from foreigners.  The BOP is determined by the country  exports and imports of goods, services, and financial capital, as well as financial transfers.

Current Account Deficit: When total export exceeds the total import then it is called as Current Account Deficit.

Difference between Current Account Deficit and Balance of Payments:

Current Account is one of the three component of Balance of Payment.

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