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First Quarter International Investment Position

First Quarter International Investment Position
Shoran Devi
August 11
11:00 2018

The international investment position (IIP) is a statistical statement that provides a snapshot of the country’s interna­tional financial assets and liabili­ties.

The IIP is a subset of the national balance sheet.

It measures the stock (or level) of Fiji’s financial assets and liabilities with the rest of the world at a par­ticular point in time.

A country’s net international as­set position may either be in sur­plus, deficit or balance.

It is in surplus if the value of for­eign assets (debt and equity) held by domestic residents exceeds the value of domestic assets held by foreigners.

Otherwise we could say that do­mestic assets exceeds domestic li­abilities.

Whereas a deficit occurs when do­mestic liabilities to foreigners ex­ceed domestic assets.

In the latest release by the Fiji Bu­reau of Statistics, Fiji’s Net Inter­national Investment Position stood at -$8,798.3 million as at March 31, 2018.

The Net International Investment Position rose by $331.7 million when compared to the December quarter of 2017.

The figure stood at -$8,129.2 mil­lion a year earlier.

The amount reflects a much high­er value of foreign investment in Fiji compared to Fiji’s investment abroad.

Fiji’s international liabilities records the liabilities of Fiji resi­dents to non-residents.

Fiji’s international liability was valued at $12,735 million as at March 31, 2018.

The breakdown by liability type are as follows:

The breakdown for other invest­ment by instruments are as follows:

Fiji’s International Assets records the financial assets of residents of Fiji that are claims on non-res­idents and monetary gold bullion held as reserve assets.

Fiji’s International asset was val­ued at $3,936.7 million as at March 31, 2018.

The breakdown by asset type are as follows:

The breakdown for other invest­ment by instruments are as follows:

Net Foreign Debt (NFD) is the amount of Fiji’s overseas lending (assets) less its overseas borrowing (liabilities).

Lending and borrowing include debt instruments only and exclude equity (shares).

As such, as at March 31, 2018:

The figure stood at $12.8 million a year earlier.

The change in net foreign debt re­flects an increase in Currency and Deposits.

Net Foreign Equity (NFE) reflects the value of Fiji’s resident invest­ment abroad less the non-resident investment in Fiji.

It includes equity, investment fund shares and other equity.

In that regard, as at 31st March 2018:

The figure stood at -$8,144.2 mil­lion a year earlier.

The change in net foreign equity reflects an increase in liabilities (foreign investment in Fiji).

The higher value of foreign di­rect investment noted in Fiji can be seen as a major catalyst to our economy’s development.

Most developing countries, emerg­ing economies and countries in transition have come increasingly to see foreign direct investment as a source of economic development and modernisation, income growth and employment.

It supplements the nation’s sav­ings, supports local businesses, helps develop infrastructure, and builds regional economies.

The Net International Invest­ment Position (NIIP) position is an important indicator of a nation’s financial condition and creditwor­thiness.

NIIP plus the value of nonfinan­cial assets is equal to the economy’s net worth.

Also, when read together with the Balance of Payment, NIIP, provides useful information in assessing a country’s economic relation with the rest of the world.

 

Feedback: maraia.vula@fijisun.com.fj

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