Rise in public debt

Press, 26 July 1989, Page 2

Rise in public debt

By

PATTRICK SMELLIE

in Wellington

Total public debt rose slightly in the year to March 31, 1989, despite Government efforts to repay overseas debt through asset sales.

At $39.6 billion, public debt was up only marginally on last year’s total of $39.1 billion, according to the Public Accounts, published yesterday. As a proportion of total economic output, public debt fell from 66 per cent of Gross Domestic Product in to 62 per cent. This is down dramatically from 84 per cent two years* ago.

Public debt is the total amount owed by the Government both in New Zealand and overseas.

The weaker New Zealand dollar was part of the reason why overseas debt repayments of $664 million did not bring a fall in the total. The drop in the dollar took the total up $599 million, as well as increasing internal debt by $1.2 billion. The debt total was made up of $16.7 billion in overseas debt and $22.5 billion in New Zealand-dollar debt.

Newly devised tables show an improvement in public overseas debt in the last three years. Consolidated external debt fell from 45.5 per cent of G.D.P. in 1986/87 to 26.7 per cent in 198&/89.

As a proportion of total external receipts — mainly exports — the level was still high in the last year at 90.8 per cent, but down from 139.8 per cent in 1986/87.