CAPITAL ACCOUNT

Graph 1. Net lending (net borrowing), by sector, relative to GDP, seasonally adjusted


Australia has generally been a net borrower from overseas. In the national accounts, this is reflected by a negative value for net lending to non-residents. The last time Australia was a net lender of funds to the rest of world was June quarter 1975. The ratio of net borrowing from overseas to GDP in December quarter 2015 was 5.2%, up from 4.6% in September quarter 2015.

In December quarter 2015, general government net borrowing relative to GDP was 2.4%, the same as the net borrowing position of 2.4% in September quarter 2015. Non financial corporations net borrowing relative to GDP was 4.3% and net lending for financial corporations was 1.6%. Household net lending relative to GDP fell from 1.7% in September quarter 2015 to 0.9% in December quarter 2015, it's lowest level since September quarter 2008.

Graph 2. Gross fixed capital formation, by sector, relative to GDP, seasonally adjusted


Gross fixed capital formation by sector represents investment in capital assets. Capital investment by non-financial corporations as a proportion of GDP started growing during the 2000s peaking at 17.2% in the December quarter 2012. It has since fallen to 12.5% of GDP in December quarter 2015.

Household capital investment as a proportion of GDP decreased gradually from 11.0% in March quarter 2004 to 7.7% in March quarter 2013. This was the result of growth in GDP being stronger than growth in household gross fixed capital formation. However, since March quarter 2013, growth in household gross fixed capital formation has been outpacing growth in GDP, resulting in the rise in the ratio that we are currently seeing. In December quarter 2015, household capital investment was 9.5% of GDP.

General government capital investment as a proportion of GDP remained steady at approximately 3.0% through the 2000s, peaking at 4.6% in March 2010. In September quarter 2015, General government capital investment was 3.0% of GDP.