Glossary

  • Balance of payments

    The record of a country's transactions with the rest of the world. The "current account" of the balance of payments consists of: visible trade (goods); "invisible" trade (services and income); private transfer payments (eg, remittances from those working abroad); official transfers (eg, payments to international organisations, famine relief). Visible imports and exports are normally complied on rather different definitions to those used in the trade statistics (shown in principal imports and exports) and therefore the statistics do not match. The "capital account" consists of long- and short-term transactions relating to a country's assets and liabilities (eg, loans and borrowings). The "current and capital accounts", plus an errors and omissions item, make up the "overall balance". "Changes in reserves" include gold at market prices and are shown without the practice often followed in balance of payments presentations of reversing the sign.

  • Big Mac Index

    A light-hearted way of looking at exchange rates. If the dollar price of a burger at McDonald’s in any country is higher than the price in the United States, converting at market exchange rates, then that country’s currency could be thought to be over-valued against the dollar and vice versa.

  • Body-mass index

    A measure for assessing obesity – weight in kilograms divided by height in metres squared. An index of 30 or more is regarded as an indicator of obesity; 25 to 29.9 as overweight. Guidelines vary for men and for women and may be adjusted for age.

  • CFA

    Communauté Financière Africaine. Its members, most of the francophone African nations, share a common currency, the CFA franc, pegged to the euro.

  • CIS

    CIS is the Commonwealth of Independent States, including Georgia, Turkmenistan and Ukraine.

  • Cif/fob

    Measure of the value of merchandise trade. Imports include the cost of "carriage, insurance and freight" (cif) from the exporting country to the importing. The value of exports does not include these elements and is recorded "free on board" (fob). Balance of payments statistics are generally adjusted so that both exports and imports are shown fob; the cif elements are included in the invisibles.

  • Crude birth rate

    The number of live births in a year per 1,000 population. The crude rate will automatically be relatively high if a large proportion of the population is of childbearing age.

  • Crude death rate

    The number of deaths in a year per 1,000 population. Also affected by the population's age structure.

  • Debt, foreign

    Financial obligations owed by a country to the rest of the world and repayable in a foreign currency. The "debt service ratio" is a debt service (principal repayments plus interest payments) expressed as a percentage of the country's earnings from exports of goods and services.

  • Debt, household

    All liabilities that require payment of interest or principal in the future.

  • EU

    European Union. Members are: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom.

  • Economic Freedom Index

    The ranking includes data on labour or business freedom as well as trade policy, taxation, monetary policy, the banking system, foreign-investment rules, property rights, government spending regulation policy, the level of corruption and the extent of wage and control prices.

  • Effective Exchange Rate

    The nominal index measures a currency's depreciation (figures below 100) or appreciation (figures over 100) from a base date against a trade-weighted basket of the currencies of the country's main trading partners. The real effective exchange rate reflects adjustments for relative movements in prices or costs.

  • Euro area

    The 19 euro area members of the EU are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia and Spain. Their common currency is the euro.

  • Fertility rate

    The average number of children born to a woman who completes her childbearing years.

  • G7

    Group of seven countries: United States, Japan, Germany, United Kingdom, France, Italy and Canada.

  • GDP

    Gross domestic product. The sum of all output produced by economic activity within a country. GNP (gross national product) and GNI (gross national income) include net income from abroad eg, rent, profits.

  • Import cover

    The number of months of imports covered by reserves ie, reserves ÷ 1/12 annual imports (visibles and invisibles) .

  • Inflation

    The annual rate at which prices are increasing. The most common measure and the one shown here is the increase in the consumer price index.

  • Life expectancy

    The average length of time a baby born today can expect to live.

  • Literacy

    is defined by UNESCO as the ability to read and write a simple sentence, but definitions can vary from country to country.

  • Median age

    Divides the age distribution into two halves. Half of the population is above and half below the median age.

  • Money supply

    A measure of the "money" available to buy goods and services. Various definitions exist. The measures shown here are based on definitions used by the IMF and may differ from measures used nationally. Narrow money (M1) consists of cash in circulation and demand deposits (bank deposits that can be withdrawn on demand). "Quasi-money" (time, savings and foreign currency deposits) is added to this to create broad money.

  • OECD

    Organisation for Economic Cooperation and Development. The "rich countries" club was established in 1961 to promote economic growth and the expansion of world trade. It is based in Paris and now has 34 members.

  • Official reserves

    The stock of gold and foreign currency held by a country to finance any calls that may be made for the settlement of foreign debt.

  • Opec

    Organisation of Petroleum Exporting Countries. Set up in 1960 and based in Vienna, Opec is mainly concerned with oil pricing and production issues. Members are: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. Indonesia rejoined on January 1 2016.

  • PPP

    Purchasing power parity. PPP statistics adjust for cost of living differences by replacing normal exchange rates with rates designed to equalise the prices of a standard "basket" of goods and services. These are used to obtain PPP estimates of GDP per head. PPP estimates are shown on an index, taking the United States as 100.

  • Real terms

    Figures adjusted to exclude the effect of inflation.

  • SDR

    Special drawing right. The reserve currency, introduced by the IMF in 1970, was intended to replace gold and national currencies in settling international transactions. The IMF uses SDRs for book-keeping purposes and issues them to member countries. Their value is based on a basket of the US dollar (with a weight of 41.9%), the euro (37.4%), the Japanese yen (9.4%) and the pound sterling (11.3%).