Briefly explains the disequilibrium in the Balance of Payment?

Briefly explains the disequilibrium in the Balance of Payment?
1- NATURAL FACTOR 

Natural calamities, such as accordance of drought or floods may easily cause disequilibrium in the balance of payment.

2- INFLATIONARY PRESSURE 

An inflationary rise in prices within the country may also lead to disequilibrium in its balance of payments. The price of export items may go up thereby causing a decline in the volume of exports.

3- POLITICAL INSTABILITY 

The political instability may cause a serious disequilibrium in the concerned country’s balance of payment. For the existence of this issue may result in disrupting the productive potential within the country, therefore causing a decline in export and an increase in import.


4- LARGE SCALE OF CAPITAL MOVEMENTS 

The large scale of capital movements can also induce disequilibrium in the balance of payments of the concerned country. A large inflow of foreign capital into the country is said to follow a favorable balance of payment.


5- TRADE CYCLE 

Business fluctuations caused by the operation of trade cycle may also result in disequilibrium in a country’s balance of payments. For instance, if there occurs a business recession in foreign countries, it may induce a fall in the exports and exchange earnings of the country concerned.