Treasurer Bill English welcomed today evidence that New Zealanders are becoming larger investors offshore, and that the returns they are receiving on those investments are better than previously thought.

"At the end of March this year, New Zealanders had a total of $40.3 billion invested abroad. This is an increase of over $5.5 billion from a year earlier.

The Balance of Payments data released last week also showed that New Zealand investors have been getting a better return on their overseas investments than we had previously thought.

“This is encouraging for the long term outlook for New Zealand’s current account deficit. A large proportion of New Zealand’s current account deficit is because New Zealand residents pay more in dividends and interest to non-residents than they receive from offshore. This reflects the fact that New Zealand residents own less offshore than overseas residents have invested in New Zealand.

“But as New Zealanders increase the stock of their investments they hold offshore, this will become less important.

“This bodes well for New Zealand’s current account deficit over the longer term, although a widening of the deficit over the second half of 1999 is still expected.

“The increase in New Zealand’s offshore asset position led to an improvement in New Zealand’s net international investment position. At March 1999 foreign investment in New Zealand outweighed New Zealand investment abroad by $85.9 billion, down from $89.3 billion a year earlier. This is the first time since the series began in 1989 that our net position has shown an improvement,” said Mr English.

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