New Zealand investment in USA increases

Australia, the UK, and the USA continue to be New Zealand’s main investment partners, Statistics New Zealand said today. The level of New Zealand’s investment in these three countries increased $8.9 billion from 31 March 2008 to 31 March 2009, mostly due to greater levels of investment in the USA.

The level of New Zealand’s investment abroad was $126.1 billion at 31 March 2009, 25.0 percent ($31.5 billion) of which was invested in the USA, up from 20.9 percent at 31 March 2008. However, Australia remains New Zealand’s most significant investment partner, and was the destination for $35.6 billion (28.2 percent) of investment abroad.

Australia is still the largest source of foreign investment in New Zealand, and together with the UK and the USA accounted for $203.2 billion (67.8 percent) of total investment in New Zealand at 31 March 2009. Since 31 March 2004, investment from Australia has increased $45.2 billion (88.5 percent), due mainly to loans by Australian banks to their New Zealand subsidiaries combined with increased direct investment.

During the March 2009 year, financial transactions resulted in a net $8.9 billion withdrawal of foreign investment from New Zealand. “This is the first time that there has been a net withdrawal of foreign investment out of New Zealand since the current series began in the year ended March 2001”, said John Morris, manager of Government and International Accounts. There was also a $16.1 billion withdrawal of New Zealand investment from overseas during the March 2009 year, of which 61.7 percent involved the drawing down of reserve assets.

At 31 March 2009, the finance and insurance industry held 62.5 percent of New Zealand’s assets abroad, and 60.7 percent of New Zealand’s international liabilities. Since 31 March 2004 the electricity, gas, water, and waste services industry has increased the value of its international liabilities by $5.4 billion, mainly due to increased foreign direct investment.

At 31 March 2009, New Zealand’s foreign currency external debt was $117.5 billion. Of this debt, 91.9 percent was hedged in some way to manage risk.

Geoff Bascand
Government Statistician