Primary and Secondary Income – Balance of Payments

On the current account balance of payments.

Primary income

Primary income is defined as earnings arising from the provision of a factor of production:
labour, financial assets, land, and natural resources

This includes

  1. Income from interest, profits, and dividends (generated from foreign investment).
  2. Compensation of employees
  3. Taxes and subsidies on products and production
    (e.g., sales tax or value added,


Secondary income

Secondary income is defined as the redistribution of income through current transfers. By
governments, multinational organisations or charities.

This includes spending and transfers on foreign overseas aid, and payment to multinational bodies.

Long-term remittances

IMF Details on secondary income


source: IMF

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