RDP 9405: External Debt and Liabilities of Industrial Countries 4. Summary Tables of External Assets and Liabilities

This section contains summary statistics of the external assets and liabilities of industrial and selected developing countries. Both gross and net measures are presented.

4.1 External Debt

There is a wide range of variation in the gross indebtedness of the industrial countries in this sample. The least indebted countries (in gross terms) have external debt-to-GDP ratios of around 30 per cent, with the highest having a debt-to-GDP ratio in excess of 250 per cent (Figure 1 and Table 5). Australia's gross external debt-to-GDP ratio, at just over 50 per cent, is not unusually high by international standards, despite growing very rapidly in the 1980s. Many countries with high gross levels of external debt also have considerable holdings of external non-equity assets. Consequently, their net external debt is considerably lower than their gross indebtedness. Compared with the other countries in the sample, Australia has a very low level of external non-equity assets. Thus, while Australia's gross level of external debt is relatively low compared with other industrial countries, its net indebtedness is relatively high (Figure 1 and Table 6). Australia is among a group of nine industrial countries that has net external debt in excess of 30 per cent of GDP.

Table 5: Gross External Debt and Non-Equity Assets 1993*
(per cent of GDP)
Rank Debt Non-Equity Assets
1 Belgium-Luxembourg 266.8 Belgium-Luxembourg 342.2
2 Denmark 113.2 Switzerland 199.3
3 Ireland 108.7 Netherlands 101.3
4 Sweden 104.8 Denmark 78.6
5 Finland 104.0 Ireland 64.6
6 Switzerland 92.0 Germany 63.0
7 Netherlands 88.0 Austria 60.2
8 Iceland 72.9 France 58.4
9 Greece 70.7 Portugal 49.3
10 Canada 69.8 Norway 46.8
11 New Zealand 68.4 Sweden 45.9
12 Austria 63.4 Finland 44.6
13 France 58.3 Italy 34.6
14 Germany 55.6 Greece 30.6
15 Norway 53.9 Spain 26.6
16 Australia 52.8 Canada 25.4
17 Italy 43.7 United States 18.2
18 Portugal 41.4 Iceland 12.2
19 United States 34.4 Australia 11.3
20 Japan 33.8 New Zealand 6.8
21 Spain 31.9 Japan
Note: * For Austria, Belgium-Luxembourg, Greece, Italy, the Netherlands, Portugal, Spain and Switzerland the latest data available are for end 1992. For Australia and New Zealand the data refer to the financial year ending in June and March 1993, respectively. No data are available for the UK on external debt or non-equity assets.
Table 6: Net External Debt 1984 and 1993
(per cent of GDP)
Rank 1984 1993*
1 Ireland 63.0 New Zealand 61.6
2 Iceland 60.5 Iceland 60.6
3 Greece 45.1 Finland 59.4
4 Denmark 37.8 Sweden 58.9
5 Portugal 29.1 Canada 44.4
6 Canada 24.8 Ireland 44.1
7 Sweden 23.1 Australia 41.5
8 Finland 20.5 Greece 40.1
9 Norway 16.7 Denmark 34.5
10 Australia 15.9 United States 16.3
11 Spain 8.1 Italy 9.1
12 United States 2.8 Norway 7.1
13 Germany −6.8 Spain 5.3
14 France −7.5 Austria 3.2
15 Belgium-Luxembourg −16.3 France −0.1
16 Netherlands −24.4 Germany −7.4
17 Switzerland −137.4 Portugal −7.9
18 Italy Netherlands −13.3
19 New Zealand Belgium-Luxembourg −75.4
20 Austria Switzerland −107.4
Note: * For Austria, Belgium-Luxembourg, Greece, Italy, the Netherlands, Portugal, Spain and Switzerland the latest data available are for end 1992. For Australia and New Zealand the data refer to the financial year ending in June and March, respectively. No data are available for Japan and the UK on net external debt.
Figure 1: External Debt

A characteristic of the Australian data is that much of the net external debt is owed by the non-official sector (Table 7). Net official external debt is relatively low in Australia. Over the past decade, Australia has consistently been ranked in the middle of the industrial countries in terms of net official debt. In 1993, net official debt was 8.4 per cent of GDP, up from a net asset position of 2.6 per cent of GDP in 1984. The net external debt of the Australian non-official sector has risen from 18.5 per cent of GDP to 33.1 per cent between 1984 and 1993. In the developing countries, net external debt tends to be concentrated in the official sector, though most recently there have been shifts towards the non-official sector (Table 8).[14]

Table 7: Composition of Net External Debt 1993*
(per cent of GDP)
Rank Non-Official Official
1 Iceland 40.3 Denmark 43.6
2 New Zealand 39.1 Ireland 38.8
3 Sweden 36.3 Finland 29.2
4 Australia 33.1 Canada 23.4
5 Finland 30.2 Sweden 22.7
6 Greece 25.8 New Zealand 22.5
7 Canada 21.0 Iceland 20.3
8 Norway 17.2 Greece 14.3
9 Italy 12.1 Germany 10.3
10 Spain 12.0 Australia 8.4
11 United States 9.7 United States 6.6
12 Ireland 5.4 France 3.7
13 Austria 3.2 Austria 0.0
14 Portugal 2.1 Netherlands −0.6
15 France −3.9 Belgium-Luxembourg −1.5
16 Denmark −9.0 Italy −3.1
17 Netherlands −12.7 Spain −6.6
18 Germany −17.7 Portugal −10.0
19 Belgium-Luxembourg −73.8 Norway −10.1
20 Switzerland −89.5 Switzerland −17.8
Note: * For Austria, Belgium-Luxembourg, Greece, Italy, the Netherlands, Portugal, Spain and Switzerland the latest data available are for end 1992. For Australia and New Zealand the data refer to the financial year ending in June and March 1993, respectively. No data are available for Japan and the UK on net external debt.
Table 8: Net External Debt of Selected Developing Countries 1992
(per cent of GDP)
Net External
Debt
Net Official
Debt
Net Non-
Official Debt
Argentina 15.4 12.6 2.9
Brazil 17.8 12.2 5.6
Chile 15.7 −1.6 17.4
China 4.0 4.3 −0.2
India 21.7 16.5 5.1
Indonesia 48.2 29.4 18.8
Korea −7.1 −14.2 7.0
Malaysia −1.5 −13.4 11.9
Mexico 22.0 15.0 7.0
Pakistan 39.3 35.6 3.8
Peru 30.4 23.6 6.8
Philippines 39.9 35.5 4.4
South Africa 9.4 5.1 4.3
Thailand 13.5 −15.5 29.0
Turkey 30.2 22.8 7.4
Venezuela 12.4 21.2 −8.8

4.2 External Liabilities

Developments in Australia's overall external position (debt plus equity) mirror that of external debt discussed previously. Australia's gross external liabilities doubled between 1984 and 1993 to 82.3 per cent of GDP. This is around the middle of the range of estimates for the industrial countries (Figure 2 and Table 9). For a number of countries such as the United Kingdom, Switzerland and Belgium-Luxembourg, gross liability data are inflated by international banking. Table 10 attempts to adjust for this by subtracting from total gross portfolio and other liabilities those owed by banks and adding back net bank liabilities if positive. While this changes the absolute level of gross liabilities of a number of countries, Australia's relative position is little changed.

Table 9: Gross External Assets and Liabilities 1993*
(per cent of GDP)
Rank Assets Liabilities
1 Belgium-Luxembourg 355.5 Belgium-Luxembourg 340.2
2 Switzerland 249.6 UK 216.5
3 UK 219.7 Switzerland 149.3
4 Netherlands 145.0 Netherlands 125.2
5 Denmark 94.0 Denmark 125.1
6 Germany 77.8 Sweden 120.6
7 Sweden 74.3 Finland 114.2
8 France 73.2 New Zealand 98.6
9 Austria 66.4 Canada 89.6
10 Finland 55.5 Australia 82.3
11 Japan 52.0 France 73.9
12 Norway 51.6 Austria 70.5
13 Italy 48.0 Germany 63.8
14 Canada 45.5 Norway 59.5
15 United States 41.5 Italy 57.7
16 Spain 30.3 Spain 52.4
17 New Zealand 28.2 United States 49.5
18 Australia 27.8 Japan 37.5
Note: * For Austria, Belgium-Luxembourg, the Netherlands, Spain and Switzerland the latest data available are for end 1992. For Australia and New Zealand the data refer to the financial year ending in June and March 1993, respectively.
Table 10: Gross Portfolio and Other Liabilities 1993*
(per cent of GDP)
Rank Total Net of Banks
1 Belgium-Luxembourg 305.2 Sweden 97.3
2 UK 195.6 Finland 92.6
3 Switzerland 131.0 Denmark 92.4
4 Denmark 113.2 UK 88.0
5 Sweden 112.4 Belgium-Luxembourg 84.3
6 Finland 109.4 Switzerland 77.4
7 Netherlands 98.5 Canada 62.1
8 Canada 69.0 New Zealand 58.1
9 Austria 64.4 Australia 53.6
10 France 63.5 Netherlands 45.6
11 New Zealand 61.7 Italy 39.3
12 Germany 56.8 Germany 33.7
13 Australia 54.8 Norway 31.7
14 Italy 51.7 Spain 30.0
15 Norway 43.2 Austria 28.0
16 Spain 39.9 United States 27.8
17 United States 37.8 France 21.8
18 Japan 37.1 Japan 20.6
Note: * Note: For Austria, Belgium-Luxembourg, Norway, the Netherlands, Spain and Switzerland the latest data available are for end 1992. For Australia and New Zealand the data refer to the financial year ending in June and March 1993, respectively.
Figure 2: External Liabilities and Assets

Australia's overall level of external assets is low compared with most countries despite doubling in the past decade (Figure 2 and Table 9). Consequently, while the gross level of external liabilities is currently in the mid-range of industrial countries, Australia has one of the highest net external liability positions (Figure 2 and Table 11). In 1993, Australia's net external liabilities were 54.5 per cent of GDP, with only New Zealand (70.4 per cent) and Finland (58.7 per cent) reporting larger figures. There were six countries with net external liabilities of at least 30 per cent of GDP in 1993.

Table 11: Net External Liabilities 1984 and 1993
(per cent of GDP)
Rank 1984 1993*
1 Denmark 41.4 New Zealand 70.4
2 Canada 34.0 Finland 58.7
3 Australia 28.3 Australia 54.5
4 Sweden 21.4 Sweden 46.3
5 Finland 20.2 Canada 44.0
6 Norway 16.7 Denmark 31.1
7 Spain 12.5 Spain 22.1
8 Austria 6.3 Italy 9.6
9 Italy −1.3 United States 8.0
10 United States −4.5 Norway 7.9
11 Japan −6.2 Austria 4.1
12 France −7.7 France 0.7
13 Germany −7.6 UK −3.3
14 Belgium-Luxembourg −9.5 Germany −14.0
15 UK −24.0 Japan −14.6
16 Netherlands −34.0 Belgium-Luxembourg −15.3
17 Switzerland −123.0 Netherlands −19.8
18 New Zealand Switzerland −100.3
Note: * For Austria, Belgium-Luxembourg, the Netherlands, Spain and Switzerland the latest data available are for end 1992. For Australia and New Zealand the data refer to the financial year ending in June and March, respectively.

Ireland and Iceland may also fall into this group but there are no data available covering equity assets and liabilities to enable such a comparison[15]. Differences in valuation methods probably do not have a major impact upon the relative standing of Australia[16].

Disaggregating net external liabilities by function, Australia had the second highest level of net direct investment liabilities of the industrial countries in 1993 (Figure 3 and Table 12). Since 1984, net direct investment liabilities have risen by 4 percentage points of GDP to 16.3 per cent of GDP[17]. Once again, differences in valuation method are unlikely to be the cause of Australia's relatively high net liability position. In terms of net portfolio and other liabilities, Australia ranks fifth (Figure 4 and Table 12). The net level of liabilities has more than doubled to 38.2 per cent of GDP over this period.

Table 12: Composition of Net External Liabilities 1993*
(per cent of GDP)
Rank Portfolio and Other Direct Investment
1 Finland 69.4 New Zealand 25.2
2 Sweden 63.8 Australia 16.3
3 New Zealand 45.3 Belgium-Luxembourg 12.3
4 Canada 39.7 Spain 8.2
5 Australia 38.2 Canada 4.3
6 Denmark 31.4 Austria 1.8
7 Spain 13.9 Norway 1.7
8 Italy 12.6 Denmark −0.3
9 United States 11.8 France −2.9
10 Norway 7.5 Italy −3.0
11 France 3.6 Germany −3.5
12 UK 3.4 United States −3.9
13 Austria 2.3 Japan −5.8
14 Netherlands −5.3 UK −6.6
15 Japan −8.8 Finland −10.6
16 Germany −10.5 Switzerland −13.0
17 Belgium-Luxembourg −27.7 Netherlands −14.5
18 Switzerland −87.3 Sweden −17.5
Note: * For Austria, Belgium-Luxembourg, the Netherlands, Norway, Spain and Switzerland the latest data available are for end 1992. For Australia and New Zealand the data refer to the financial year ending in June and March 1993, respectively.
Figure 3: Direct Investment
Figure 4: Portfolio and Other Liabilities and Assets

Footnotes

For the developing countries the debt classified as official is that which is long-term and is either owed or guaranteed by the government sector. Short-term debt has no sectorial classification and is therefore grouped with the non-official sector. [14]

Data are not available for three industrial countries that have a high level of net external debt – Ireland, Iceland and Greece – due to a lack of information on equity stocks. (Also it must be remembered that for Ireland the external debt data do not include the non-bank private sector). A comparison of the net income deficits of these countries with other high net liability economies suggests that Ireland may have the highest net liability position of all. Its net income deficit in 1993 was almost 11 per cent of GDP compared with something closer to 4 per cent for the other highly indebted countries. The net income deficit for Greece is quite low at around 1/4 of a per cent of GDP, suggesting a large net equity asset position and/or a significant underestimation of non-equity assets. [15]

Canada's net equity liability position is in balance and therefore the valuation effects may net out. A similar situation exists for Denmark. Sweden has a large net asset position for both equity and direct investment, so we may expect that their net liability position may actually be lower. [16]

Australia has a similar high level (and ranking) in terms of net equity liabilities. [17]