Creditor Nation

DEFINITION of 'Creditor Nation'

A nation with a cumulative balance of payment surplus. A creditor nation has positive net investment after recording all of the financial transactions completed between it and the rest of the world.

BREAKING DOWN 'Creditor Nation'

Creditor nations have invested more resources in other countries than the rest of the world has invested in them. To determine if a country is a creditor nation, one must account for the the nation's overall debt balance when calculating the balance of payments.

Creditor nations can sometimes lose their status and become debtor nations. This happened to the United States in 1988 when its balance of payments turned negative.

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RELATED FAQS
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