Overseas debt stable, statistics show

Press, 7 December 1988, Page 8

Overseas debt stable, statistics show

By

PATTRICK SMELLIE

New Zealand’s longterm overseas debt remained relatively stable in the three months ended September 30, Statistics Department figures released yesterday show. The falling New Zealand dollar meant the total of long-term debt held offshore rose 0.4 per cent to $30.23 billion.

But repayments of debt, particularly by the Government, restricted the impact of realised and unrealised foreign exchange losses which pushed the debt total up. The Government sector showed a small improvement in its overseas debt levels, falling 2.5 per cent ($0.45 billion) to $17.5 billion.

Private sector long

term overseas debt increased 3.7 per cent over the quarter, totalling $6.23 billion. Other Government borrowing — including offshore borrowing by State-owned enterprises — rose 5.7 per cent to $6.47 billion.

The department noted that the Government sector debt was now spread more evenly than in the past among various foreign currencies, with 40.7 per cent held in United States dollars, and 29.6 per cent in Japanese yen.

The Opposition spokeswoman on finance, Miss Ruth Richardson, said the figures showed how vulnerable New Zealand was to changes in the exchange rate.

“A significant fall in the New Zealand dollar would push up our debt and debt servicing in New Zealand dollars correspondingly,” she said. The Minister of Finance, Mr Douglas, said the figures demonstrated the Government’s success in repaying overseas debt. "In particular, in July the Government repaid a loan $lOOO million which was taken out eight days before the 1984 election,” he said.

The survey of overseas debt measures only longterm debt, excluding large amounts of borrowing taken out for one year or less.

A Statistics Department spokesman said a survey of short-term overseas debt would not begin until well into next year.