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Research Paper no. 3 2002-03

Australia's Foreign Debt

Tony Kryger
Statistics Group
3 March 2003

Major Issues
Introduction
Level of Foreign Debt
As a Percentage of Gross Domestic Product
Interest Liability
As a Percentage of Gross Domestic Product
Historical Perspective
Interest as a Percentage of Gross Domestic Product
Composition of Gross Foreign Debt by Institutional Sector
Composition of Gross Foreign Debt by Currency
Composition of Gross Foreign Debt by Country
Composition of Gross Foreign Debt by Maturity
Components of Increase in Net Foreign Debt
Composition of Net Foreign Investment-Debt and Equities
Endnotes

List of Tables
Table 1. Gross and Net Foreign Debt, 1976-2002
Table 2. Interest on Foreign Debt, 1959-60 to 2001-02
Table 3. Historical Data, 1900-01 to 2001-02
Table 4. Composition of Gross Foreign Debt-Institutional Sector, 1980-2002
Table 5. Composition of Gross Foreign Debt-Currency, 1981-2002
Table 6. Composition of Gross Foreign Debt-Country, 1992-2001
Table 7. Composition of Gross Foreign Debt-Residual Maturity of Debt Outstanding, 1997-2002
Table 8. Components of Increase in Net Foreign Debt, 1988-89 to 2001-02
Table 9. Net Foreign Investment In Australia-Levels, 1980-2002

Major Issues

Australia has always been a net recipient of overseas funds.

After being fairly low and stable for a number of years, Australia's foreign debt grew rapidly after 1981. Between 1981 and 2002, the level of foreign debt increased from $19 billion to $527 billion in gross terms and from $9 billion to $330 billion in net terms, i.e. after deducting Australia's reserve assets and lending abroad. (Table 1.)

The foreign debt to gross domestic product (GDP) ratio gives an indication of what has been happening to debt relative to the size of the economy. Between 1981 and 2002, Australia's gross foreign debt increased from 13 to 74 per cent of GDP, while net foreign debt increased from 6 to 46 per cent. (Table 1.)

The ratio of Australia's interest payments on gross foreign debt to GDP averaged around half of one per cent through the 1960s and most of the 1970s. It then increased rapidly to peak at 4.0 per cent in 1990-91, falling to 2.6 per cent in 2001-02. Therefore, 2.6 per cent of the value of all goods and services produced within Australia in 2001-02 was required to meet the interest commitment on our gross foreign debt in that year. (Table 2.)

In 2002, Australia's gross foreign debt as a proportion of GDP was at its second highest level in more than 60 years. A higher level of debt was recorded in 2001 but before this, the only times when debt as a proportion of GDP was higher, were the periods 1901 to 1906 and 1931 to 1937. (Tables 1 and 3.)

For all of the period from the mid-1940s through to the early 1980s, the ratio of Australia's interest payments on gross foreign debt to the value of its exports of goods and services (or debt service ratio) was below 6 per cent. It increased steadily thereafter and by 1991 had climbed to 24 per cent, falling to 12 per cent in 2002. (Table 3.)

Over the past couple of decades, the general government and Reserve Bank's share of gross foreign debt has fallen sharply, as has the share held by private non-financial corporations. Whereas the latter were for many years the largest holders of debt, that position has long since been overtaken by private financial corporations which in 2001 held 69 per cent of gross foreign debt. (Table 4.)

The proportion of debt denominated in Australian dollars increased substantially from 12 per cent in 1981 to 45 per cent in 1997, falling to 33 per cent in 2002. The greater the proportion of debt denominated in Australian dollars, the lower the risk that a fall in the $A will increase the level of debt. (Table 5.)

The most important creditor countries for Australia have consistently been the United States, United Kingdom and Japan. The relative importance of these countries has changed over time so that whereas Japan was the most important creditor country in the early 1990s, that position has now gone to the United States. In 2001, the United States accounted for 26 per cent of Australia's gross foreign debt. (Table 6.)

The turnover of foreign debt is rapid with most loans outstanding due within a very short period. In 2002, 55 per cent of loans were due within a year and 40 per cent were due within 90 days. (Table 7.)

Exchange rate movements have at times had a significant impact on the level of debt. For example, well over half the increase in net foreign debt that occurred between June 2000 and June 2001 was due to the decline in the value of the Australian dollar that occurred over this time. (Table 8.)

For many years, foreign investment in Australia has been predominantly in the form of borrowed funds from overseas. This was not always the case and whereas debt accounted for 86 per cent of net foreign investment in 2002, the corresponding figure in 1980 was only 29 per cent. (Table 9.)

Introduction

This paper on foreign debt is the third update of a paper originally prepared in September 1989⁽¹⁾.

The objectives of this paper are to provide explanation and detailed information on:

the levels of gross and net foreign debt;

comparisons over time;

the interest liability on foreign debt;

composition of foreign debt, by institutional sector, currency, country and repayment period; and

the relationship between foreign borrowings and other capital inflows.

Level of Foreign Debt

Dollar Amount

Concepts

Foreign debt is defined as the amount borrowed from non-residents by residents of Australia. It is also called external debt or the level of foreign borrowing. Foreign debt is distinguished from other kinds of foreign investment capital inflow such as foreign ownership, because it carries with it the obligation to pay interest and repay the principal. It should be noted that foreign debt does not equal 'national debt'. The latter is the total government debt-which comprises government borrowing from overseas residents and government borrowing from Australian residents-and thus excludes overseas borrowings by the private sector.

Gross foreign debt is the total amount of borrowings from non-residents. It includes securities issued such as bonds as well as loans, advances, deposits, debentures and overdrafts.

Net foreign debt is the gross foreign debt, minus the value of foreign reserves held by the Reserve Bank of Australia and minus lending by residents of Australia to non-residents. Reserve assets held by the Reserve Bank comprise gold, foreign exchange, special drawing rights and Australia's reserve position in the International Monetary Fund.

Comments

The gross foreign debt at June 2002 was $527 billion. After deducting Australia's reserve assets and lending abroad of $196 billion, there was a net foreign debt of $330 billion. After being fairly low and stable through the late 1970s and early 1980s, foreign debt increased steadily after 1981, largely as a result of the accumulation of high current account deficits and the expansion of Australian equity investment abroad. Part of this overseas investment was funded by increased borrowings.

Between June 1981 and June 2002, gross foreign debt rose at an annual average rate of 17.2 per cent. The corresponding figure for net foreign debt was higher at 18.5 per cent, reflecting the fact that Australian lending abroad has not risen as fast as Australian borrowings.

Details: Table 1 and Figure 1.

As a Percentage of Gross Domestic Product

Concepts

Foreign debt is often expressed as a percentage of annual gross domestic product (GDP) in order to show its significance relative to the size of the overall economy. It allows more appropriate comparisons over time, as GDP grows with inflation and population, and reflects to a degree the economy's capacity to repay. GDP is a measure of the total output of the economy. Although this ratio is a conventional measure, it does not mean that this proportion of GDP must be applied to foreign debt. GDP is a flow of goods and services during a period, while foreign debt is a level at one point in time which will involve interest and repayments of principal over many periods into the future.

Two other measures of the relative size of foreign debt are presented in Table 1. One is the ratio of foreign debt to the capital stock (i.e. the total value of dwellings, other buildings, engineering construction and equipment). The second is the ratio of foreign debt to the value of exports of goods and services.

Data on average debt per person (or family) are sometimes used as a dramatic way of presenting foreign debt statistics. This may make large numbers easier to comprehend, but can be misleading to the extent that it suggests that liability for the debt is evenly divided through the whole population. In fact, liability lies largely with businesses (including foreign-owned), which financed the purchase of assets, which in turn generate income to service and repay the debt.

Comments

Throughout the late 1970s and early 1980s, gross foreign debt was fairly low at less than 15 per cent of GDP. It increased rapidly after 1981 and in the six years to June 1987 it more than tripled from 13 to 45 per cent of GDP. It continued to increase steadily over the next few years to 61 per cent at June 1999, rising sharply to 74 per cent at June 2001.

A similar pattern is evident for net foreign debt as a proportion of GDP which has increased more than seven-fold since June 1981.

Gross foreign debt has risen from around 80 per cent of annual exports of goods and services in June 1981, to well over triple those exports for the entire period from June 1998. Gross foreign debt is currently 3.4 times the value of exports.

Net foreign debt per capita has increased from $600 in June 1981 to $16,800 in June 2002.

Details: Table 1 and Figure 2.

Table 1. Gross and Net Foreign Debt, 1976-2002

30 June	$ million		per cent of GDP		per cent		$ per capita
30 June	Gross foreign debt	Net foreign debt	Gross foreign debt	Net foreign debt	Net foreign debt / Net capital stock	Gross foreign debt / Exports goods & services	Gross foreign debt	Net foreign debt
1976	7647	3133	9.6	3.9	1.4	68.1	545	223
1977	9929	5160	10.8	5.6	2.1	74.0	700	364
1978	12664	7434	12.6	7.4	2.7	88.9	882	518
1979	15615	9553	13.8	8.5	3.0	92.3	1076	658
1980	16666	7923	13.0	6.2	2.2	75.7	1134	539
1981	18847	9361	12.9	6.4	2.2	83.4	1263	627
1982	29394	18378	17.6	11.0	3.7	124.0	1936	1210
1983	41224	25169	22.8	13.9	4.6	160.8	2678	1635
1984	50676	31850	24.9	15.7	5.3	175.4	3253	2044
1985	75452	53055	33.5	23.6	8.0	211.1	4779	3360
1986	101925	78396	41.1	31.6	10.4	261.7	6363	4894
1987	122439	87971	45.0	32.3	10.6	276.3	7528	5409
1988	138130	96502	44.5	31.1	10.5	267.0	8355	5837
1989	161874	113989	46.0	32.4	11.1	292.4	9627	6779
1990	184239	130809	47.8	34.0	11.7	302.5	10796	7665
1991	197662	143153	49.7	36.0	12.3	298.3	11436	8282
1992	217955	162466	53.6	39.9	13.7	311.0	12458	9287
1993	238542	177453	56.0	41.6	14.5	310.2	13502	10044
1994	246484	171313	55.1	38.3	13.5	296.9	13805	9595
1995	268247	190790	56.9	40.5	14.4	306.0	14843	10557
1996	275533	193872	54.8	38.6	14.1	278.0	15048	10588
1997	302846	208628	57.2	39.4	14.7	288.0	16337	11254
1998	346971	227782	61.8	40.6	15.2	305.0	18496	12142
1999	359839	230689	60.8	39.0	14.5	321.2	18955	12152
2000	421771	277804	67.0	44.2	16.4	334.6	21938	14450
2001	498775	313472	74.2	46.6	17.3	324.9	25598	16088
2002	526501	330457	73.5	46.2	17.6	345.5	26716	16768

Interest Liability

Dollar Amount

Concepts

Interest payments on debt are an important aspect of the impact of foreign debt. While the level of debt reflects the amount of principal that needs to be repaid over a number of years, interest liabilities are incurred throughout the period of the loan.

Comments

After being fairly low for a number of years, Australia's interest liability on foreign debt increased from $1 billion in 1979-80 to $16 billion in 1990-91. It then fell, as the result of declining interest rates, to $11 billion in 1993-94, increasing to $17 billion in 1999-00 and $19 billion in 2000-01. In 2001-02, Australia's interest liability on foreign debt was $18 billion.

Details: Table 2 and Figure 3.

As a Percentage of Gross Domestic Product

Concepts

As with the level of debt, it is useful to obtain a measure of the relative size of interest on foreign debt. The method most commonly used is interest as a percentage of exports of goods and services (or debt service ratio). This measure emphasises the international liquidity aspects of interest payments. Another method is interest as a percentage of GDP, which emphasises the burden on incomes.

The debt service ratio makes possible more meaningful comparisons over time, because both interest and exports are affected by inflation. As well, exports of goods and services provide a source of foreign exchange income that can be applied to meeting interest payments. (Other sources of foreign exchange are property and labour income, transfer payments and further borrowing.)

An estimate of the interest rate on gross foreign debt can be obtained by dividing the interest paid in a given year by the weighted sum of two-thirds the debt stock at the start of the year and one-third the debt stock at the end of the year. This accords with a method published by former Economic Planning Advisory Council⁽²⁾.

Comments

Interest paid on gross foreign debt was around half of one per cent of GDP through the 1960s and most of the 1970s. The interest liability climbed to around 3 per cent in the latter half of the 1980s and peaked at 4.0 per cent in 1990-91. It has since fallen and for all of the period since 1992-93 it has remained below 3 per cent. In 2001-02, Australia's interest liability was 2.6 per cent of GDP, meaning that 2.6 per cent of the value of all goods and services produced within Australia was required to meet the interest commitment on our gross foreign debt.

Interest received from overseas is relatively small. In 2001-02 it amounted to 0.6 per cent of GDP.

As a percentage of exports of goods and services, gross interest has risen from between 3 and 5 per cent in the 1960s and 1970s to peak at 24.0 per cent in 1990-91. By 2001-02, gross interest had fallen to 12.0 per cent and net interest to 9.2 per cent of the value of goods and services exported.

The average interest rate for 2001-02 was 3.6 per cent per annum, considerably below rates of between 8 and 9 per cent that were common during the 1980s.

Details: Table 2 and Figure 4.

Table 2. Interest on Foreign Debt, 1959-60 to 2001-02

$ Million and Debt Service Ratios

	$ million		% of exports of goods and services		% of GDP		% p.a.
	Interest on gross foreign debt	Interest on net foreign debt	Interest on gross foreign debt	Interest on net foreign debt	Interest on gross foreign debt	Interest on net foreign debt	Average interest rate
1959-60	61	34	2.8	1.6	0.4	0.2	n.a.
1960-61	68	35	3.1	1.6	0.4	0.2	n.a.
1961-62	72	24	2.9	1.0	0.4	0.1	n.a.
1962-63	75	39	3.0	1.6	0.4	0.2	n.a.
1963-64	83	36	2.6	1.1	0.4	0.2	n.a.
1964-65	88	27	2.9	0.9	0.4	0.1	n.a.
1965-66	102	49	3.3	1.6	0.4	0.2	n.a.
1966-67	112	49	3.2	1.4	0.4	0.2	n.a.
1967-68	124	71	3.5	2.0	0.4	0.3	n.a.
1968-69	154	79	4.0	2.0	0.5	0.3	n.a.
1969-70	191	118	4.0	2.5	0.5	0.3	5.5
1970-71	237	143	4.7	2.8	0.6	0.4	6.0
1971-72	293	150	5.2	2.6	0.7	0.4	6.0
1972-73	297	78	4.2	1.1	0.6	0.2	5.4
1973-74	306	8	3.9	0.1	0.5	0.0	5.9
1974-75	404	123	4.0	1.2	0.6	0.2	7.6
1975-76	435	240	3.9	2.1	0.5	0.3	6.7
1976-77	477	314	3.6	2.3	0.5	0.3	5.7
1977-78	576	449	4.0	3.2	0.6	0.4	5.3
1978-79	838	677	5.0	4.0	0.7	0.6	6.1
1979-80	1108	908	5.0	4.1	0.9	0.7	6.9
1980-81	1216	938	5.4	4.1	0.8	0.6	7.0
1981-82	1839	1582	7.8	6.7	1.1	0.9	8.2

Table 2. Interest on Foreign Debt, 1959-60 to 2001-02 continued

$ Million and Debt Service Ratios

	$ million		% of exports of goods and services		% of GDP		% p.a.
	Interest on gross foreign debt	Interest on net foreign debt	Interest on gross foreign debt	Interest on net foreign debt	Interest on gross foreign debt	Interest on net foreign debt	Average interest rate
1982-83	2839	2302	11.1	9.0	1.6	1.3	8.5
1983-84	3705	2884	12.8	10.0	1.8	1.4	8.3
1984-85	5297	4382	14.8	12.3	2.4	1.9	9.0
1985-86	6703	5932	17.2	15.2	2.7	2.4	8.0
1986-87	7891	7214	17.8	16.3	2.9	2.6	7.3
1987-88	8845	7793	17.1	15.1	2.8	2.5	6.9
1988-89	11197	9416	20.2	17.0	3.2	2.7	7.7
1989-90	14420	11935	23.7	19.6	3.7	3.1	8.5
1990-91	15922	12884	24.0	19.4	4.0	3.2	8.4
1991-92	13690	10717	19.5	15.3	3.4	2.6	6.7
1992-93	12123	9367	15.8	12.2	2.8	2.2	5.4
1993-94	11240	8961	13.5	10.8	2.5	2.0	4.7
1994-95	13215	10750	15.1	12.3	2.8	2.3	5.2
1995-96	13606	11362	13.7	11.5	2.7	2.3	5.0
1996-97	14276	11785	13.6	11.2	2.7	2.2	5.0
1997-98	14211	11040	12.5	9.7	2.5	2.0	4.5
1998-99	13643	10572	12.2	9.4	2.3	1.8	3.9
1999-00	17210	13300	13.7	10.6	2.7	2.1	4.5
2000-01	19395	14770	12.6	9.6	2.9	2.2	4.3
2001-02	18265	14007	12.0	9.2	2.6	2.0	3.6

Note: Where interest on foreign debt was not available, total interest paid overseas was used.

Historical Perspective

Debt as a Percentage of Gross Domestic Product

Concepts

Long-term data can be used to give an historical perspective on Australia's current foreign debt situation. Comprehensive estimates of foreign debt are only available from 1976 onwards. However, data for public securities held overseas are available for the whole of last century. Although public securities now represent only a minor part of foreign debt, this was not the case in the past. While estimates of private foreign debt are not available for earlier years, data on interest paid suggest that the level of this debt was insignificant prior to the mid-1960s. There exists therefore a reasonable, although not comprehensive, measure of foreign debt since 1901.

Comments

As a proportion of GDP, Australia's foreign debt has risen rapidly from less than 10 per cent in the mid 1970s to 74 per cent today. Since the level of debt on public securities represents almost all of total debt during the first half of last century, it is possible to say that Australia's gross foreign debt as a proportion of GDP in 2001-02 was at its second highest level, while in 2000-01 it was at its highest level, in more than 60 years. Higher levels of debt were recorded in the periods 1900-01 to 1905-06 and 1930-31 to 1936-37.

Details: Table 3 and Figure 5.

Interest as a Percentage of Gross Domestic Product

Concepts

Interest payments on public securities held overseas are also available for the whole of the twentieth century. Total interest payments on foreign debt are available since official balance of payments statistics were first compiled (for 1936-37 to 1939-40 and from 1945-46 onwards). The difference between total interest payments on foreign debt and interest payments on only public securities held overseas is so small, however, as to be virtually negligible before the mid-1960s.

Comments

For the first three decades of last century, Australia's interest liability on foreign debt (approximated by its interest liability on public securities held overseas) fluctuated mostly between 2 and 3 per cent of GDP. It then climbed to 4.4 per cent in 1930-31, before falling to less than one per cent for all of the 1950s, 1960s, 1970s and the early part of the 1980s. It climbed to 4.0 per cent in 1990-91, before falling again and in 2001-02 was equal to 2.6 per cent of GDP.

For all of the period from the mid-1940s through to the early 1980s, the ratio of Australia's interest on foreign debt to the value of its exports of goods and services (or debt service ratio) was below 6 per cent. It climbed steadily thereafter and by 1990-91 it had reached 24.0 per cent, falling by half to 12.0 per cent in 2001-02.

Details: Table 3 and Figure 6.

Table 3. Historical Data, 1900-01 to 2001-02

	Level of gross foreign debt				Interest on gross foreign debt
	Public securities / Official		Total		Public securities / Official			Total
	$ million	% of GDP	$ million	% of GDP	$ million	% of exports of goods & services	% of GDP	$ million	% of exports of goods & services	% of GDP
1900-01	357	85.2	n.a.	n.a.	13	12.6	3.1	n.a.	n.a.	n.a.
1901-02	364	82.0	n.a.	n.a.	13	13.4	2.9	n.a.	n.a.	n.a.
1902-03	375	87.6	n.a.	n.a.	14	14.9	3.3	n.a.	n.a.	n.a.
1903-04	377	84.2	n.a.	n.a.	14	13.2	3.1	n.a.	n.a.	n.a.
1904-05	378	85.1	n.a.	n.a.	14	11.6	3.2	n.a.	n.a.	n.a.
1905-06	384	80.2	n.a.	n.a.	14	10.5	2.9	n.a.	n.a.	n.a.
1906-07	372	69.1	n.a.	n.a.	13	8.8	2.4	n.a.	n.a.	n.a.
1907-08	367	68.5	n.a.	n.a.	13	9.0	2.4	n.a.	n.a.	n.a.
1908-09	381	66.5	n.a.	n.a.	14	10.1	2.4	n.a.	n.a.	n.a.
1909-10	383	61.5	n.a.	n.a.	14	8.9	2.2	n.a.	n.a.	n.a.
1910-11	382	55.8	n.a.	n.a.	14	8.4	2.0	n.a.	n.a.	n.a.
1911-12	388	52.9	n.a.	n.a.	14	8.5	1.9	n.a.	n.a.	n.a.
1912-13	409	51.0	n.a.	n.a.	15	8.8	1.9	n.a.	n.a.	n.a.
1913-14	455	52.7	n.a.	n.a.	16	9.4	1.9	n.a.	n.a.	n.a.
1914-15	493	58.8	n.a.	n.a.	19	13.4	2.3	n.a.	n.a.	n.a.
1915-16	542	55.9	n.a.	n.a.	21	12.7	2.2	n.a.	n.a.	n.a.
1916-17	587	57.4	n.a.	n.a.	23	9.5	2.3	n.a.	n.a.	n.a.
1917-18	701	66.0	n.a.	n.a.	29	13.9	2.7	n.a.	n.a.	n.a.
1918-19	694	60.6	n.a.	n.a.	29	12.8	2.5	n.a.	n.a.	n.a.
1919-20	716	57.1	n.a.	n.a.	31	10.3	2.5	n.a.	n.a.	n.a.
1920-21	743	53.8	n.a.	n.a.	33	12.3	2.4	n.a.	n.a.	n.a.
1921-22	823	59.7	n.a.	n.a.	38	14.2	2.8	n.a.	n.a.	n.a.
1922-23	839	55.6	n.a.	n.a.	38	14.5	2.5	n.a.	n.a.	n.a.
1923-24	922	58.8	n.a.	n.a.	43	16.2	2.7	n.a.	n.a.	n.a.
1924-25	928	53.9	n.a.	n.a.	44	12.9	2.6	n.a.	n.a.	n.a.
1925-26	1004	60.5	n.a.	n.a.	48	15.9	2.9	n.a.	n.a.	n.a.

Table 3. Historical Data, 1900-01 to 2001-02 continued

	Level of gross foreign debt				Interest on gross foreign debt
	Public securities / Official		Total		Public securities / Official			Total
	$ million	% of GDP	$ million	% of GDP	$ million	% of exports of goods & services	% of GDP	$ million	% of exports of goods & services	% of GDP
1926-27	1032	59.7	n.a.	n.a.	49	17.1	2.8	n.a.	n.a.	n.a.
1927-28	1142	65.7	n.a.	n.a.	55	18.8	3.2	n.a.	n.a.	n.a.
1928-29	1144	66.8	n.a.	n.a.	55	17.9	3.2	n.a.	n.a.	n.a.
1929-30	1150	73.4	n.a.	n.a.	55	25.5	3.5	n.a.	n.a.	n.a.
1930-31	1198	93.1	n.a.	n.a.	57	28.4	4.4	n.a.	n.a.	n.a.
1931-32	1310	108.3	n.a.	n.a.	49	22.4	4.0	n.a.	n.a.	n.a.
1932-33	1299	102.8	n.a.	n.a.	47	20.9	3.7	n.a.	n.a.	n.a.
1933-34	1289	95.1	n.a.	n.a.	44	17.0	3.2	n.a.	n.a.	n.a.
1934-35	1286	89.8	n.a.	n.a.	43	17.6	3.0	n.a.	n.a.	n.a.
1935-36	1281	81.4	n.a.	n.a.	42	14.6	2.7	n.a.	n.a.	n.a.
1936-37	1278	74.4	n.a.	n.a.	41	11.5	2.4	42	11.8	2.4
1937-38	1278	68.8	n.a.	n.a.	41	11.7	2.2	42	12.0	2.3
1938-39	1288	70.8	n.a.	n.a.	41	13.1	2.3	42	13.4	2.3
1939-40	1306	66.0	n.a.	n.a.	41	10.9	2.1	42	11.2	2.1
1940-41	1324	61.7	n.a.	n.a.	42	11.1	2.0	n.a.	n.a.	n.a.
1941-42	1317	52.7	n.a.	n.a.	40	9.6	1.6	n.a.	n.a.	n.a.
1942-43	1321	46.2	n.a.	n.a.	40	9.3	1.4	n.a.	n.a.	n.a.
1943-44	1269	43.7	n.a.	n.a.	39	6.6	1.3	n.a.	n.a.	n.a.
1944-45	1230	43.3	n.a.	n.a.	38	7.2	1.3	n.a.	n.a.	n.a.
1945-46	1148	39.1	n.a.	n.a.	32	5.7	1.1	33	5.9	1.1
1946-47	1111	35.6	n.a.	n.a.	31	4.7	1.0	32	4.9	1.0
1947-48	1122	29.9	n.a.	n.a.	29	3.2	0.8	30	3.3	0.8
1948-49	1093	24.4	n.a.	n.a.	28	2.5	0.6	30	2.6	0.7
1949-50	1099	20.9	n.a.	n.a.	27	2.1	0.5	29	2.2	0.6
1950-51	1067	15.2	n.a.	n.a.	26	1.2	0.4	27	1.3	0.4
1951-52	1113	14.8	n.a.	n.a.	27	1.8	0.4	28	1.9	0.4

Table 3. Historical Data, 1900-01 to 2001-02 continued

	Level of gross foreign debt				Interest on gross foreign debt
	Public securities / Official		Total		Public securities / Official			Total
	$ million	% of GDP	$ million	% of GDP	$ million	% of exports of goods & services	% of GDP	$ million	% of exports of goods & services	% of GDP
1952-53	1142	13.4	n.a.	n.a.	28	1.5	0.3	30	1.6	0.4
1953-54	1165	12.5	n.a.	n.a.	28	1.6	0.3	29	1.6	0.3
1954-55	1216	12.2	n.a.	n.a.	30	1.8	0.3	31	1.8	0.3
1955-56	1269	11.8	n.a.	n.a.	45	2.6	0.4	46	2.7	0.4
1956-57	1216	10.4	n.a.	n.a.	44	2.0	0.4	46	2.1	0.4
1957-58	1248	10.4	n.a.	n.a.	47	2.6	0.4	49	2.7	0.4
1958-59	1319	10.2	n.a.	n.a.	52	2.8	0.4	54	2.9	0.4
1959-60	1389	8.8	n.a.	n.a.	56	2.6	0.4	61	2.8	0.4
1960-61	1413	8.5	n.a.	n.a.	60	2.8	0.4	68	3.1	0.4
1961-62	1424	8.4	n.a.	n.a.	61	2.5	0.4	72	2.9	0.4
1962-63	1522	8.4	n.a.	n.a.	67	2.7	0.4	75	3.0	0.4
1963-64	1545	7.7	n.a.	n.a.	69	2.2	0.3	83	2.6	0.4
1964-65	1539	7.0	n.a.	n.a.	69	2.3	0.3	88	2.9	0.4
1965-66	1505	6.5	n.a.	n.a.	69	2.2	0.3	102	3.3	0.4
1966-67	1562	6.1	n.a.	n.a.	73	2.1	0.3	112	3.2	0.4
1967-68	1557	5.6	n.a.	n.a.	77	2.2	0.3	124	3.5	0.4
1968-69	1747	5.6	n.a.	n.a.	84	2.2	0.3	154	4.0	0.5
1969-70	1636	4.7	n.a.	n.a.	91	1.9	0.3	191	4.0	0.5
1970-71	1600	4.2	n.a.	n.a.	89	1.7	0.2	237	4.7	0.6
1971-72	1497	3.5	n.a.	n.a.	91	1.6	0.2	293	5.2	0.7
1972-73	1350	2.8	n.a.	n.a.	84	1.2	0.2	297	4.2	0.6
1973-74	1163	2.0	n.a.	n.a.	80	1.0	0.1	306	3.9	0.5
1974-75	1334	2.0	n.a.	n.a.	86	0.9	0.1	404	4.0	0.6
1975-76	1501	1.9	7647	9.6	94	0.8	0.1	435	3.9	0.5
1976-77	2417	2.6	9929	10.8	130	1.0	0.1	477	3.6	0.5
1977-78	4351	4.3	12664	12.6	187	1.3	0.2	576	4.0	0.6

Table 3. Historical Data, 1900-01 to 2001-02 continued

	Level of gross foreign debt				Interest on gross foreign debt
	Public securities / Official		Total		Public securities / Official			Total
	$ million	% of GDP	$ million	% of GDP	$ million	% of exports of goods & services	% of GDP	$ million	% of exports of goods & services	% of GDP
1978-79	5928	5.3	15615	13.8	356	2.1	0.3	838	5.0	0.7
1979-80	5894	4.6	16666	13.0	438	2.0	0.3	1108	5.0	0.9
1980-81	5105	3.5	18847	12.9	416	1.8	0.3	1216	5.4	0.8
1981-82	6046	3.6	29394	17.6	435	1.8	0.3	1839	7.8	1.1
1982-83	8151	4.5	41224	22.8	596	2.3	0.3	2839	11.1	1.6
1983-84	9242	4.5	50676	24.9	711	2.5	0.3	3705	12.8	1.8
1984-85	15211	6.8	75452	33.5	964	2.7	0.4	5297	14.8	2.4
1985-86	23934	9.6	101925	41.1	1474	3.8	0.6	6703	17.2	2.7
1986-87	30763	11.3	122439	45.0	2288	5.2	0.8	7891	17.8	2.9
1987-88	32350	10.4	138130	44.5	2962	5.7	1.0	8845	17.1	2.8
1988-89	32013	9.1	161874	46.0	3209	5.8	0.9	11197	20.2	3.2
1989-90	37475	9.7	184239	47.8	3982	6.5	1.0	14420	23.7	3.7
1990-91	39856	10.0	197662	49.7	4437	6.7	1.1	15922	24.0	4.0
1991-92	47638	11.7	217955	53.6	3777	5.4	0.9	13690	19.5	3.4
1992-93	58825	13.8	238542	56.0	3335	4.3	0.8	12123	15.8	2.8
1993-94	62179	13.9	246484	55.1	3658	4.4	0.8	11240	13.5	2.5
1994-95	78372	16.6	268247	56.9	4952	5.6	1.1	13215	15.1	2.8
1995-96	81136	16.1	275533	54.8	5066	5.1	1.0	13606	13.7	2.7
1996-97	82824	15.6	302846	57.2	4900	4.7	0.9	14276	13.6	2.7
1997-98	75082	13.4	346971	61.8	3753	3.3	0.7	14211	12.5	2.5
1998-99	65185	11.0	359839	60.8	2990	2.7	0.5	13643	12.2	2.3
1999-00	51966	8.3	421771	67.0	2884	2.3	0.5	17210	13.7	2.7
2000-01	51771	7.7	498775	74.2	2355	1.5	0.4	19395	12.6	2.9
2001-02	50035	7.0	526501	73.5	2198	1.4	0.3	18265	12.0	2.6

n.a. Not available

Note : Where interest on foreign debt was not available, total interest paid overseas was used.

Composition of Gross Foreign Debt by Institutional Sector

Concepts

Foreign debt may be classified by the type of borrower.

The private sector comprises all corporations outside the general government sector. It can be subdivided into financial and non-financial corporations. Financial corporations, such as banks and insurance companies, are mainly engaged in incurring liabilities and acquiring financial assets while non-financial corporations are mainly engaged in the production of goods and services for sale.

The public sector comprises the general government sector, and all financial and non-financial corporations controlled by the general government sector. General government consists of departments, offices and organisations which are the agencies of the Commonwealth, State or local public authorities. Public financial corporations include the Reserve Bank and central borrowing authorities. Central borrowing authorities are entities set up by State and Territory governments to centralise their borrowing and financial assets management. It has only been since 1984 that State and Territory governments have begun borrowing in their own right⁽³⁾; local government foreign borrowing is negligible.

Comments

Among the interesting trends in the distribution of gross foreign debt by institutional sector are:

Decline in the general government and Reserve Bank's share of gross foreign debt from 35 per cent in 1980 to 8 per cent in 1992, rising to 14 per cent in 1996 and falling again to 5 per cent in 2002.

Growth in the central borrowing authorities' (i.e. State and Territory governments') share from nil in 1983 to 18 per cent in 1995, falling to 5 per cent in 2002.

Little change in the private sector's share during the 1980s and first half of the 1990s, increasing rapidly from 63 per cent in 1996 to 87 per cent in 2002.

Rapid rise in the private financial corporations' share from 7 per cent in 1980 to 69 per cent in 2002.

Decline in the private non-financial corporations' share from 48 per cent in 1980 to 18 per cent in 2002.

Details: Table 4 and Figure 7.

Table 4. Composition of Gross Foreign Debt-Institutional Sector, 1980-2002

$ Million

	Public Sector				Private Sector			Total gross foreign debt
30 June	General government and Reserve Bank	Central borrowing authorities	Other	Total public sector	Financial corporations	Non- financial corporations	Total private sector	Total gross foreign debt
1980	5894	0	1497	7391	1226	8049	9275	16666
1981	5105	0	2122	7227	1753	9867	11620	18847
1982	6046	0	3786	9832	3464	16098	19562	29394
1983	8151	0	6895	15046	4269	21909	26178	41224
1984	8902	340	9358	18600	6086	25990	32076	50676
1985	13310	1901	15597	30808	10121	34523	44644	75452
1986	20079	3855	19864	43798	15957	42170	58127	101925
1987	24079	6684	20251	51014	23070	48355	71425	122439
1988	23932	8418	21155	53505	32474	52151	84625	138130
1989	19344	12669	25999	58012	41515	62347	103862	161874
1990	20498	16977	30181	67656	51161	65421	116583	184239
1991	18347	21509	29364	69220	62457	65985	128441	197661
1992	18038	29600	30522	78160	72263	67532	139795	217955
1993	23417	35408	33128	91953	74922	71666	146588	238541
1994	24545	37634	30963	93142	88926	64417	153342	246484
1995	30027	48345	23352	101724	103729	62795	166524	268248
1996	39748	41388	20133	101269	115780	58484	174264	275533
1997	42621	40203	13454	96278	145415	61153	206568	302846
1998	38511	36571	11639	86721	187507	72742	260250	346971
1999	32413	32772	10094	75279	209734	74825	284560	359839
2000	22906	29060	11479	63445	271377	86949	358326	421771
2001	24149	27622	17179	68950	328896	100929	429825	498775
2002	25109	24926	18201	68236	362602	95663	458265	526501

Table 4. Composition of Gross Foreign Debt-Institutional Sector, 1980-2002 continued

Per Cent of Total

	Public Sector				Private Sector			Total gross foreign debt
30 June	General government and Reserve Bank	Central borrowing authorities	Other	Total public sector	Financial corporations	Non- financial corporations	Total private sector	Total gross foreign debt
1980	35.4	0.0	9.0	44.3	7.4	48.3	55.7	100.0
1981	27.1	0.0	11.3	38.3	9.3	52.4	61.7	100.0
1982	20.6	0.0	12.9	33.4	11.8	54.8	66.6	100.0
1983	19.8	0.0	16.7	36.5	10.4	53.1	63.5	100.0
1984	17.6	0.7	18.5	36.7	12.0	51.3	63.3	100.0
1985	17.6	2.5	20.7	40.8	13.4	45.8	59.2	100.0
1986	19.7	3.8	19.5	43.0	15.7	41.4	57.0	100.0
1987	19.7	5.5	16.5	41.7	18.8	39.5	58.3	100.0
1988	17.3	6.1	15.3	38.7	23.5	37.8	61.3	100.0
1989	12.0	7.8	16.1	35.8	25.6	38.5	64.2	100.0
1990	11.1	9.2	16.4	36.7	27.8	35.5	63.3	100.0
1991	9.3	10.9	14.9	35.0	31.6	33.4	65.0	100.0
1992	8.3	13.6	14.0	35.9	33.2	31.0	64.1	100.0
1993	9.8	14.8	13.9	38.5	31.4	30.0	61.5	100.0
1994	10.0	15.3	12.6	37.8	36.1	26.1	62.2	100.0
1995	11.2	18.0	8.7	37.9	38.7	23.4	62.1	100.0
1996	14.4	15.0	7.3	36.8	42.0	21.2	63.2	100.0
1997	14.1	13.3	4.4	31.8	48.0	20.2	68.2	100.0
1998	11.1	10.5	3.4	25.0	54.0	21.0	75.0	100.0
1999	9.0	9.1	2.8	20.9	58.3	20.8	79.1	100.0
2000	5.4	6.9	2.7	15.0	64.3	20.6	85.0	100.0
2001	4.8	5.5	3.4	13.8	65.9	20.2	86.2	100.0
2002	4.8	4.7	3.5	13.0	68.9	18.2	87.0	100.0

Table 4. Composition of Gross Foreign Debt-Institutional Sector, 1980-2002 continued

Per Cent of GDP

	Public Sector				Private Sector			Total gross foreign debt
30 June	General government and Reserve Bank	Central borrowing authorities	Other	Total public sector	Financial corporations	Non- financial corporations	Total private sector	Total gross foreign debt
1980	4.6	0.0	1.2	5.7	1.0	6.3	7.2	13.0
1981	3.5	0.0	1.5	5.0	1.2	6.8	8.0	12.9
1982	3.6	0.0	2.3	5.9	2.1	9.6	11.7	17.6
1983	4.5	0.0	3.8	8.3	2.4	12.1	14.5	22.8
1984	4.4	0.2	4.6	9.1	3.0	12.8	15.8	24.9
1985	5.9	0.8	6.9	13.7	4.5	15.3	19.8	33.5
1986	8.1	1.6	8.0	17.6	6.4	17.0	23.4	41.1
1987	8.8	2.5	7.4	18.7	8.5	17.8	26.2	45.0
1988	7.7	2.7	6.8	17.2	10.5	16.8	27.2	44.5
1989	5.5	3.6	7.4	16.5	11.8	17.7	29.5	46.0
1990	5.3	4.4	7.8	17.6	13.3	17.0	30.3	47.8
1991	4.6	5.4	7.4	17.4	15.7	16.6	32.3	49.7
1992	4.4	7.3	7.5	19.2	17.8	16.6	34.4	53.6
1993	5.5	8.3	7.8	21.6	17.6	16.8	34.4	56.0
1994	5.5	8.4	6.9	20.8	19.9	14.4	34.3	55.1
1995	6.4	10.3	5.0	21.6	22.0	13.3	35.3	56.9
1996	7.9	8.2	4.0	20.1	23.0	11.6	34.7	54.8
1997	8.0	7.6	2.5	18.2	27.4	11.5	39.0	57.2
1998	6.9	6.5	2.1	15.5	33.4	13.0	46.4	61.8
1999	5.5	5.5	1.7	12.7	35.5	12.6	48.1	60.8
2000	3.6	4.6	1.8	10.1	43.1	13.8	56.9	67.0
2001	3.6	4.1	2.6	10.3	48.9	15.0	63.9	74.2
2002	3.5	3.5	2.5	9.5	50.6	13.4	64.0	73.5

Composition of Gross Foreign Debt by Currency

Concepts

Loans in foreign currencies are converted to Australian dollars ($A) at the exchange rate applying on the last day of the period.

The greater the proportion of debt that is denominated in foreign currency, the greater the risk that a fall in the $A with respect to another currency will increase the $A value of the debt denominated in that currency. To eliminate or reduce exposure to such risk, many Australian enterprises engage in hedging activities, predominantly through foreign currency derivative contracts. According to a survey conducted by the ABS, Australian resident enterprises in 2001 had policies in place that had the intent of hedging 77 per cent of the value of their foreign currency denominated debt assets and liabilities⁽⁴⁾.

Comments

The proportion of Australia's foreign debt denominated in $A has increased substantially since the early 1980s, reflecting the increased willingness by foreigners to hold $A denominated assets. Between 1981 and 1997, the proportion of debt denominated in $A increased from 12 to 45 per cent, falling thereafter to 33 per cent in 2002.

Of the rest, the largest share of debt is expressed in United States dollars, ranging from a high of 52 per cent in 1984 to a low of 28 per cent in 1996; in 2002 the share was 45 per cent. Small proportions of debt are denominated in Euros (6 per cent in 2002), Japanese Yen (5 per cent) and Pounds Sterling (4 per cent).

Details: Table 5 and Figure 8.

Table 5. Composition of Gross Foreign Debt-Currency, 1981-2002

$ Million (In Australian Dollar Terms)

		Foreign Currency
30 June	Australian Dollars	U.S. Dollars	Pounds Sterling	Swiss Francs	Euro	Japanese Yen	Other (a)	Total	Total gross foreign debt
1981	2198	7874	497	973	..	1066	2556	12966	18847
1982	3127	13609	748	1869	..	1196	3629	21051	29394
1983	5395	20220	1228	2356	..	1726	4967	30497	41224
1984	7278	26085	1435	2570	..	1585	5148	36823	50676
1985	12782	37192	1836	4023	..	4924	6716	54691	75452
1986	21543	45715	3032	5380	..	9148	7732	71007	101925
1987	26601	52451	3846	5212	..	9997	9310	80816	122439
1988	39934	44104	4630	5267	..	12646	16540	83187	138130
1989	56043	59416	4356	4526	..	11596	11202	91096	161874
1990	69476	58200	3197	4816	..	13155	14293	93661	184239
1991	74868	63410	2743	4113	..	16603	17087	103956	197662
1992	78528	78593	2899	3511	..	15605	12131	112739	217955
1993	82972	91927	2102	2917	..	17902	10600	125448	238542
1994	85617	84758	2173	3047	..	19435	10897	120310	246484
1995	104891	81353	2186	2655	..	21036	10456	117686	268247
1996	110784	77096	3563	2805	..	20744	21020	125228	275533
1997	137053	105522	6984	3502	..	25316	24469	165793	302846
1998	139089	138820	8004	2773	..	23816	34469	207882	346971
1999	136994	143230	9349	3307	14597	22789	29573	222845	359839
2000	146457	183388	14755	2234	24470	31544	18923	275314	421771
2001	163837	240949	18205	2176	28018	25539	20051	334938	498775
2002	175590	238254	23059	3721	30358	25440	30079	350911	526501

Table 5. Composition of Gross Foreign Debt-Currency, 1981-2002 continued

Per Cent of Total

		Foreign Currency
30 June	Australian Dollars	U.S. Dollars	Pounds Sterling	Swiss Francs	Euro	Japanese Yen	Other (a)	Total	Total gross foreign debt

1981	11.7	41.8	2.6	5.2	..	5.7	13.6	68.8	100.0
1982	10.6	46.3	2.5	6.4	..	4.1	12.3	71.6	100.0
1983	13.1	49.0	3.0	5.7	..	4.2	12.0	74.0	100.0
1984	14.4	51.5	2.8	5.1	..	3.1	10.2	72.7	100.0
1985	16.9	49.3	2.4	5.3	..	6.5	8.9	72.5	100.0
1986	21.1	44.9	3.0	5.3	..	9.0	7.6	69.7	100.0
1987	21.7	42.8	3.1	4.3	..	8.2	7.6	66.0	100.0
1988	28.9	31.9	3.4	3.8	..	9.2	12.0	60.2	100.0
1989	34.6	36.7	2.7	2.8	..	7.2	6.9	56.3	100.0
1990	37.7	31.6	1.7	2.6	..	7.1	7.8	50.8	100.0
1991	37.9	32.1	1.4	2.1	..	8.4	8.6	52.6	100.0
1992	36.0	36.1	1.3	1.6	..	7.2	5.6	51.7	100.0
1993	34.8	38.5	0.9	1.2	..	7.5	4.4	52.6	100.0
1994	34.7	34.4	0.9	1.2	..	7.9	4.4	48.8	100.0
1995	39.1	30.3	0.8	1.0	..	7.8	3.9	43.9	100.0
1996	40.2	28.0	1.3	1.0	..	7.5	7.6	45.4	100.0
1997	45.3	34.8	2.3	1.2	..	8.4	8.1	54.7	100.0
1998	40.1	40.0	2.3	0.8	..	6.9	9.9	59.9	100.0
1999	38.1	39.8	2.6	0.9	4.1	6.3	8.2	61.9	100.0
2000	34.7	43.5	3.5	0.5	5.8	7.5	4.5	65.3	100.0
2001	32.8	48.3	3.6	0.4	5.6	5.1	4.0	67.2	100.0
2002	33.4	45.3	4.4	0.7	5.8	4.8	5.7	66.6	100.0

(a) Includes reserve assets

__ Break in series due to introduction of Euro in 1999.

Composition of Gross Foreign Debt by Country

Concepts

Country refers to the foreign creditor. International capital markets such as the Eurobond market cannot be sub-divided by country. Similarly, international institutions cannot be classified to one country.

Domicile refers to the country of issue of the loan. For example, if foreigners buy Australian bonds in Australia, the loan is part of Australia's foreign debt but domiciled in Australia. Debt domiciled in Australia is typically denominated in $A. Debt domiciled abroad is actually raised overseas.

Comments

The most important creditor countries for Australia in terms of total debt are the United States, the United Kingdom and Japan, representing 26, 17 and 7 per cent of gross foreign debt respectively in 2001. 'Other' (principally international capital markets) stands at around a quarter of all debt. Almost 60 per cent of debt is owed to residents of OECD countries.

The United States, the United Kingdom and Japan have consistently been the most important creditor countries, though the relative importance of each has changed over time. In the early 1990s, Japan was the most important creditor country, followed by the United States and the United Kingdom. Since this time, however, the United States and the United Kingdom have increased their relative importance while that of Japan has declined.

The proportion of borrowing domiciled in Australia has fallen in recent years from 22 per cent in 1998 to 17 per cent in 2001.

Details: Table 6 and Figure 9.

Table 6. Composition of Gross Foreign Debt-Country, 1992-2001

$ Million

	Country:							Country Groups:				Domicile:
30 June	United States	Japan	United Kingdom	Singapore	Hong Kong	Other Countries	Other (a)	APEC	ASEAN	EU	OECD	Australia	Abroad	TOTAL
$ million
1992	33527	39592	29919	6750	9810	28279	70078	96266	7388	43906	125539	35971	181984	217955
1993	42305	40581	29961	6571	11671	29776	77677	108734	7380	44121	135958	37148	201394	238542
1994	40008	36587	32209	7304	13496	34972	81908	106997	8059	50246	136080	41881	204603	246484
1995	40773	38864	34024	6228	14223	38123	96012	110352	7260	54711	143055	44636	223611	268247
1996	46615	42772	28444	8099	13288	38286	98029	119942	9234	50620	148712	58646	216887	275533
1997	56083	42410	40460	192	16236	48881	98584	129563	9025	62788	170561	65914	236932	302846
1998	70870	38779	50990	13166	14947	45142	113077	145601	13964	75935	195119	75766	271205	346971
1999	81462	31513	47704	15908	14937	56383	111932	152422	17957	73650	195558	71481	288358	359839
2000	103249	36299	70147	16349	21347	66617	107763	190003	18820	98432	249877	69569	352202	421771
2001	127189	32183	86620	21262	31664	75820	124037	225306	24565	121463	294683	86680	412095	498775
% of Total
1992	15.4	18.2	13.7	3.1	4.5	13.0	32.2	44.2	3.4	20.1	57.6	16.5	83.5	100.0
1993	17.7	17.0	12.6	2.8	4.9	12.5	32.6	45.6	3.1	18.5	57.0	15.6	84.4	100.0
1994	16.2	14.8	13.1	3.0	5.5	14.2	33.2	43.4	3.3	20.4	55.2	17.0	83.0	100.0
1995	15.2	14.5	12.7	2.3	5.3	14.2	35.8	41.1	2.7	20.4	53.3	16.6	83.4	100.0
1996	16.9	15.5	10.3	2.9	4.8	13.9	35.6	43.5	3.4	18.4	54.0	21.3	78.7	100.0
1997	18.5	14.0	13.4	0.1	5.4	16.1	32.6	42.8	3.0	20.7	56.3	21.8	78.2	100.0
1998	20.4	11.2	14.7	3.8	4.3	13.0	32.6	42.0	4.0	21.9	56.2	21.8	78.2	100.0
1999	22.6	8.8	13.3	4.4	4.2	15.7	31.1	42.4	5.0	20.5	54.3	19.9	80.1	100.0
2000	24.5	8.6	16.6	3.9	5.1	15.8	25.6	45.0	4.5	23.3	59.2	16.5	83.5	100.0
2001	25.5	6.5	17.4	4.3	6.3	15.2	24.9	45.2	4.9	24.4	59.1	17.4	82.6	100.0

(a) Includes international institutions and data, such as international capital markets, not allocated to any particular country

Composition of Gross Foreign Debt by Maturity

Concepts

The maturity profile of foreign debt shows the period left to repayment and thus points to the liquidity aspects of foreign debt.

Comments

Most loans outstanding are due within a very short period, leaving Australia vulnerable to fluctuations in the level of debt. In 2002, 55 per cent of loans were due within a year and 40 per cent were due within 90 days. About a quarter of all loans were due later than 5 years.

The level of debt outstanding has grown significantly larger in relation to GDP. This growth has been especially marked for loans that have either a very short term or a very long term to run. Between 1997 and 2002, loans due within 90 days have grown in size from 16 to 30 per cent of GDP while loans due later than five years have grown from 9 to 18 per cent of GDP.

Details: Table 7.

Table 7. Composition of Gross Foreign Debt-Residual Maturity of Debt Outstanding, 1997-2002

	Contractually due for repayment:
	1 year or less			Greater than 1 year and up to 5 years	Greater than 5 years	Unallocated	TOTAL
30 June	Less than or up to 90 days	Greater than 90 days and up to 1 year	Total, 1 year or less	Greater than 1 year and up to 5 years	Greater than 5 years	Unallocated	TOTAL
$ million
1997	87019	47459	134478	66336	48303	53730	302846
1998	116513	54973	171486	76492	83953	15040	346971
1999	111492	55599	167091	83456	91466	17826	359839
2000	138664	72768	211432	112111	98229	0	421771
2001	191196	76627	267823	118395	112557	0	498775
2002	210944	76712	287656	111796	127048	0	526501
% of Total (excluding unallocated)
1997	34.9	19.1	54.0	26.6	19.4	-	100.0
1998	35.1	16.6	51.7	23.0	25.3	-	100.0
1999	32.6	16.3	48.9	24.4	26.7	-	100.0
2000	32.9	17.3	50.1	26.6	23.3	-	100.0
2001	38.3	15.4	53.7	23.7	22.6	-	100.0
2002	40.1	14.6	54.6	21.2	24.1	-	100.0
% of GDP
1997	16.4	9.0	25.4	12.5	9.1	10.1	57.2
1998	20.8	9.8	30.6	13.6	15.0	2.7	61.8
1999	18.8	9.4	28.2	14.1	15.5	3.0	60.8
2000	22.0	11.6	33.6	17.8	15.6	0.0	67.0
2001	28.4	11.4	39.8	17.6	16.7	0.0	74.2
2002	29.5	10.7	40.2	15.6	17.7	0.0	73.5

Components of Increase in Net Foreign Debt

Concepts

There are three components of an increase in net foreign debt that are identified in the ABS data:

transactions;

exchange rate movements;

price changes; and

other.

Transactions refers to the net increase in new borrowings from non-residents where new borrowings is the difference between drawings and repayments.

Foreign debt data are expressed in Australian dollars, although they are mostly denominated in foreign currencies. Debt estimates are converted to Australian dollars at the exchange rate applying on the last day of the period. Movements in the exchange rate of the Australian dollar can have a significant impact on the level of foreign debt expressed in Australian currency.

Price changes refers mainly to security revaluations.

Comments

Net new borrowings are often the single largest contributor to an increase in net foreign debt, though in some years other factors have also had a significant impact. In 2000-01, for example, exchange rate movements added almost twice as much as net new borrowings to the increase in net foreign debt. On several occasions the effect of exchange rate movements, security revaluations and other adjustments has been to reduce the level of net foreign debt below what it would otherwise have been. In 2001-02, net new borrowings rose by 35 billion but net foreign debt increased by only 17 billion due to the influence of these other factors.

Details: Table 8 and Figure 10.

Table 8. Components of Increase in Net Foreign Debt, 1988-89 to 2001-02

$ Million

	Transactions	Exchange rate variations	Price changes	Other adjustments	Total increase in net foreign debt
1988-89	14927	1184	-43	1420	17488
1989-90	16059	-1155	-81	1999	16822
1990-91	6682	2464	617	2583	12346
1991-92	13574	4401	680	657

Research Paper Index

Research Paper no. 3 2002-03

Australia's Foreign Debt

Tony Kryger Statistics Group 3 March 2003

Contents

Tony Kryger
Statistics Group
3 March 2003