Primary and Secondary Income – Balance of Payments

On the financial/capital account

Primary income

This includes income from interest, profits, and dividends (generated from foreign investment). It also includes remittances – these are payments from people living and working overseas and sending money back to country of origin.

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

Secondary income

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

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

Further reading

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