Foreign Investment PPT 1 Flashcards
(19 cards)
Define Foreign Investment
inflow of money from foreign investors.FI due to historic investment saving gaps
What is Net International Investment Position
Records our stock or level of foreign investment into Australia (FIA) and the level of Australia investment abroad (AIA).
The total or stock of our FI into Australia is called our Foreign Liabilities. The total or stock of our Australian Investment Abroad is called our Foreign Assets.
Australia NIIP is
net international investment position is the difference between Australia’s foreign liabilities and its foreign assets. Important to know NIIP is stock or total figure
How much did Aus foreign assets grow from 200 to 2024
500 bil to 4000 billion, Australia’s foreign assets have grown at a faster rate than liabilities
How much did Aus foreign liabliltes grow from 2000 to 2024
same time Australia’s foreign liabilities have grown from $800b to just over $4,700b
NIIP IN 2024
~$700b liability.
What is foreign investment in the context of Australia?
Foreign investment refers to financial transactions where foreign residents acquire Australian assets (foreign equity) or lend money to Australian residents (foreign debt), contributing to Australia’s foreign liabilities.
What happens when Australian residents lend to overseas entities?
This increases Australia’s foreign debt asse
What happens when Australian residents borrow from overseas?
his increases Australia’s foreign debt liability.
What are the two main types of foreign investment?
Foreign investment can be classified as either borrowing (foreign debt) or ownership (foreign equity).
What happens when Australians sell assets to foreigners (e.g., land)?
This increases Australia’s foreign equity liability.
What does a negative net foreign equity indicate?
Australia owns more foreign equity than foreign investors own in Australia.
As of June 2024, what were Australia’s net international investment statistics?
Net Foreign Debt: $1266 billion
Net Foreign Equity: -$546 billion
Net International Investment Position: $720 billion
Define Foreign Assets
Australian-owned assets held overseas
: Define Foreign Liabilities
Claims that non-residents have on Australian assets, including borrowing from overseas or sales of domestic assets to foreigners.
Define Net Foreign Debt
e value of Australia’s gross foreign debt minus Australian lending to foreigners (foreign debt assets).
Formula: Net Foreign Debt = Gross Foreign Debt – Foreign Debt Assets
Define Foreign Debt
: The total amount Australian residents owe to non-residents due to borrowing. It includes both public and private debt.
Define Foreign Equity
Ownership of Australian assets (e.g., companies, land) by foreign residents.
Define Net Foreign Equity
The value of foreign ownership of Australian assets minus Australian ownership of foreign assets.
Formula: Net Foreign Equity = Foreign Equity Liabilities – Foreign Equity Assets
