What is Balance of Trade?

Balance of trade (BOT) :
BOT is described as the difference between the vale of merchandise (goods) exports and
the value of merchandise imports. It can also be described as the ‘Goods Balance’ or the
“Balance of Merchandise Trade”. This balance reflects the country’s capacity to provide
material requirements of the population. An ‘active’ (positive) or ‘passive’ (negative) BOT
by itself does not signify economic status. An analysis of the underlying elements of
exports and imports is critical. The BOT represents the net trade in tangibles.