Current Account
Plain definition
The part of the balance of payments recording trade in goods and services, primary income (wages, investment returns), and secondary income (remittances, aid). A current-account surplus means a country earns more from abroad than it pays out.
In economics
The current account is the broadest measure of a country's external balance: the trade balance is its largest component, but income flows and remittances matter -- remittances are a major current-account inflow for countries like the Philippines and Mexico. A deficit must be financed by the financial account.
Example
Mexico's current account combines a merchandise trade balance with large remittance inflows from workers in the US, which partly offset its trade deficit.
The current account is frequently confused with the trade balance. The trade balance covers only goods (and sometimes services); the current account adds investment income, wages, and transfers like remittances and foreign aid -- so the two can differ substantially.