'The purposes and uses of the balance of payments have varied greatly' (2024)

The purpose of balance of payments statistics is to provide a comprehensive account of the economic relations between a country and the rest of the world. They describe the trade in goods and services, the financial flows in return for these goods and services, and income received or paid abroad. But behind the apparent stability of statistical definitions, the purposes and uses of the balance of payments have varied greatly.

This statistic was officially established in France and in all member countries of the International Monetary Fund (IMF) in the aftermath of the Second World War. In 1945, it was assigned to the "Office des Changes" (the Foreign Exchange Office), which was part of the Finance Ministry and was responsible for closely monitoring the inflow and outflow of foreign currencies. Statistics were produced from information transmitted to the Office by banks, which were the sole entities authorized to carry out financial transactions with foreign countries. In fact, in order to rebuild a country destroyed by war, France imported more than it exported, and found itself in a recurring deficit situation. To pay for its purchases, the country needed more foreign currency than it received from its sales. The "balance of payments crisis" of 1956-1957 was a major economic crisis. It was the result of many years of deficits that forced France to turn to foreign creditors, American ones in particular.

The end of the dollar's convertibility into gold (1971) and the 1973 oil crisis profoundly altered the picture. The exchange control objectives became less crucial. The calculation of the balance of payments, which was transferred to the Banque de France (the French central Bank) in 1960, following the abolition of the Office, changed its nature. It was no longer about strictly checking the country's foreign exchange inflows and outflows, but about measuring France's participation in the development of international trade. France exported many services abroad, such as large construction contracts, technological and financial services. The major French corporations, notably in the automobile industry, increased the number of subsidiaries outside the country. This generated both imports and exports of goods and services, but also of financial income. From the 1980s onwards, the balance of payments was no longer calculated solely by reference to bank transactions, but increasingly on the basis of information transmitted by companies themselves to the Banque de France.

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