Status of Australia's External Position, We Should Term Paper

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status of Australia's external position, we should first briefly explain the sign conventions, as they are presented in the explanatory notes 3 to 5. As such, International investment position statistics follow the sign convention used in the balance of payment: for foreign assets, "position data and any transaction increase or other flow increase in assets is shown with a negative sign." This is why all the positions noted as Australian investment abroad are marked with a negative sign, so as to show a cash flow leaving the country.

At the end of the analyzed period (September Quarter 2003), the total Australian investment abroad amounted for $477,188 million, an increase of almost $14,000 million from the beginning of the period (around 3%). The main components of the investment abroad are direct forms of investment (such as equity capital and reinvested earnings) and portfolio investment assets, these two forms of investment accounting for some 67% of total investment.

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Both types of investment have suffered slight increases from the beginning of the period, the direct investment increasing with 3% and the portfolio investment with some 3.5%.

Other components of the Australian external position included financial derivatives and loans. The first category has suffered a slight decrease during this period, which denotes a lesser inclination towards risk, possibly because of the unstable global economic climate during this period. The loan section has, however, suffered an important increase, with over 11%, mainly due to a serious increase in loans to depository corporations.

Let us now analyze some of the data we have used above and perhaps find some possible explanations for it.….....

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