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Balance of payments

The balance of payments is a statistical report systematically summarising, for a given period, the economic transactions which a country's economic agents have conducted with the rest of the world. A transaction is defined as an economic flow involving the transfer of property, goods or financial assets, the provision of services or the supply of labour and capital. All agents are defined in terms of the geographical territory in which they have their center of economic interest, i.e. from where they perform their economic activity. Transactions are recorded according to the double-entry accounting principle: each entry credited in one column is recorded as a debit in another column. Consequently, the two sides, credit and debit, are identical and the statement is known as the "balance". Transactions are recorded for a given period: month, quarter, year. By only considering part of the balance of payments, it is possible to assess the amount outstanding from a partial balance (e.g. balance of trade) or from a group of partial balances (e.g. the balance of current transactions). Thus the amount outstanding from a partial balance may be in surplus, in deficit or in equilibrium. STATEC drew up Luxembourg's first official balance of current payments in 1979. Since 2002, Luxembourg Central Bank (BCL) and STATEC are jointly responsible for drawing up the country's balance of payments.