Pages

Tuesday, 4 January 2011

We're no. #1...hundred and two

According to the CIA, New Zealand is no.102 in the world for the cumulative total of all government borrowings less repayments that are denominated in a country's home currency." We're sitting on 22%.

However, as the CIA cautions "Public debt should not be confused with external debt, which reflects the foreign currency liabilities of both the private and public sector and must be financed out of foreign exchange earnings."

Our problem, since the big debt-pay down during the 80s, is private debt. Unfortunately too many people confuse the two - and the current account deficit (which has two components to it - the balance of trade and balance of invisibles). I'm always sceptical whenever someone starts talking about the "national deficit". It could mean anything.