How to Calculate Net Exports
Net exports equal exports minus imports, a positive value is a trade surplus and a negative value is a trade deficit.
The Net Exports formula
Calculator
Enter exports and imports to get net exports, the trade balance verdict, and the GDP that follows from C, I and G.
Domestically produced goods and services sold to foreign buyers.
Foreign-made goods and services bought at home.
Household spending, used only for the GDP line below.
Business capital, new housing, and inventory change.
Government purchases. Transfer payments do not count.
Imports beat exports by $160, so net exports pull GDP down by that amount.
- Trade balance
- Trade deficit
- GDP (C + I + G + Xn)
- $3,840
- Net exports as a share of GDP
- −4.2%
The sign of net exports is the whole verdict: negative is a deficit, positive is a surplus.
Adding the four components gives $3,840, with net exports counted as −$160.
How much of measured GDP the trade balance accounts for.
How to calculate Net Exports, step by step
- 1Total the exports. Add the value of all goods and services produced domestically and sold to foreign buyers.
- 2Total the imports. Add spending on goods and services produced abroad and bought by domestic households, firms, and government.
- 3Subtract imports from exports. Net exports = exports − imports, and the answer is allowed to be negative.
- 4Read the sign. A positive figure is a trade surplus that adds to GDP; a negative figure is a trade deficit that pulls GDP down.
Worked example: Net Exports
A country exports $620 billion of goods and services and imports $780 billion. Net exports = 620 − 780 = −$160 billion, a trade deficit. With C = $2,400 billion, I = $700 billion, and G = $900 billion, GDP = 2,400 + 700 + 900 + (−160) = $3,840 billion.
Net Exports questions
Why are imports subtracted in the GDP formula?
Because C, I, and G already include spending on foreign-made goods. Subtracting imports removes output that was not produced domestically.
Can net exports be negative?
Yes, whenever imports exceed exports the country runs a trade deficit and net exports reduce measured GDP.
Are net exports the same as the current account?
No, net exports cover goods and services only. The current account is broader because it also includes investment income and transfer payments.
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