Services Accounts or Invisible Trade:

The second section consists of services. It records the services of shipping and civil aviation, insurance, dividends, profits, remittances, government services, travel and tourism, banking services, etc. This section also includes unilateral transfers (gifts), that is, money transferred to and from without rendering any services.

Transactions on the current account except unilateral transfers are referred to as autonomous meaning they are undertaken because of profit motive. The difference between invisible exports and invisible imports is called the balance of services. This is classified as favourable or unfavourable. When invisible exports exceed invisible imports we have favourable balance of services, other wise we have unfavourable balance of services.