March 20, 2013

NZ's debt to rest of world grows

Net foreign liabilities - a measure of what New Zealand owes the rest of the
 world - rose to $150 billion or 71.7% of GDP in the year according to a Radio NZ report

For a small economy, distant from world markets and reliant so heavily on one export sector this news should be cause for concern.  We need a coherent strategy to develop at least two other major export sectors.  ICT looks as if it could grow into one of those.  Either way an economy owing so much to offshore financiers will remain vulnerable to external shocks until it has a plan to diminish that vulnerability and then executes against that plan.

One element towards a comprehensive solution is that the government must get back to surplus at the earliest opportunity.  But wouldn't it also be smart to look to the private sector savings levels and reduction of household debt to contribute to this overseas-debt reduction cause?

9 comments:

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Daniel Lang said...

Net foreign liabilities have risen and are a concern. The Government are thankful that our free trade agreement with China has been beneficial. I advocate the agreement with China and am endeavouring to get more talks going about a free trade agreement with India even though it will take a lot of time and consideration because of India's complex legal systems, because I can see that it will be beneficial for both parties and because both countries have significant ties with the British Crown and this should be an important factor to take into consideration when deciding what country to do business with. Another good thing is that India is expanding economically and will soon have sufficient infrastructure in place for more first world countries to do business with them more easily.

I am a centrist and write the "Central Party of New Zealand and other insane stuff" blog and am thankful to have another centrist outlet at which to express my views.

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xây nhà đẹp said...

We need a coherent strategy to develop
xây dựng nhà phố , xây biệt thự đẹp