| Balance of Trade | Balance of Payment |
| 1. Balance of trade refers to the difference between exports and imports of goods by a country in a year. | 1. Balance of payments is a statement of all economic transactions between residents of a country and rest of the world during a year. |
| 2. It is a narrow concept as it is a component of balance of payments. | 2. It is a wider concept. |
| 3. It is only a partial record. Hence, it is not a true indicator of economic relations with other countries. | 3. It is a complete record of economic transactions with the rest of the world. Hence, it provides a true picture of the economy of a country with the rest of the world. |
| 4. It may be favourable or unfavourable. | 4. From accounting view-point, it is always balanced. |
