Trade balance refers to the difference between a country's exports and imports over a specific period. When a country exports more goods and services than it imports, it has a trade surplus, which is generally seen as a positive indicator of economic health. Conversely, if imports exceed exports, the country faces a trade deficit, which can raise concerns about economic stability. A healthy trade balance is important for a nation's economy, as it can influence currency value and overall growth. Factors like global demand, exchange rates, and government policies can all impact a country's trade balance, making it a key focus for economists and policymakers.