Country Report Australia October 1996 Main report

Foreign trade & payments: Net foreign debt rises

Australia's net foreign debt rose by A$2.7bn during the second quarter of 1996 to stand at A$187.8bn. Net capital transactions for the quarter amounted to A$3.6bn, while higher security and share prices led to a further increase of A$573m. A stronger Australian dollar pulled A$1.6bn off the overall increase in foreign indebtedness. Net foreign debt amounted to 38.6% of GDP at the end of the second quarter, marginally below its first- quarter share and 1.3 percentage points below the level prevailing one year earlier.

The private sector's gross foreign borrowing rose by A$3.5bn during the second quarter. This was only partly offset by an increase of A$1.1bn in its lending abroad. The sector's net foreign debt increased by A$2.3bn. The increase in the public sector's gross foreign borrowing amounted to A$1.5bn during the second quarter. Most of this was offset by a rise in net lending abroad of A$1.1bn, and the sector's net foreign debt rose by A$326m.

Thanks largely to export growth, Australia's debt-service ratio (the interest payable on its net foreign debt as a percentage of its exports of goods and services) eased to 11.3% during the second quarter, from 11.9% in the first quarter.

© 1996 The Economist lntelligence Unit Ltd. All rights reserved
Whilst every effort has been taken to verify the accuracy of this information, The Economist lntelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this information
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