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 2014 was 2.4%, down from 3.1% in September quarter 2014.

In the December quarter 2014, financial corporations net lending relative to GDP was 1.5%, a slight fall from a net lending position of 1.6% in September quarter. General government net borrowing relative to GDP was 3.1%, net borrowing for non-financial corporations was 4.2%, while household net lending was 2.6%.

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 17.1% in the December quarter 2012. It has since returned to levels similar to 2009, representing 14.2% of GDP in December quarter 2014.

Household capital investment as a proportion of GDP remained steady at around 10% of GDP through the 2000s. Since June quarter 2008, growth in GDP has been stronger than growth in household gross fixed capital formation resulting in the ratio falling gradually. March quarter 2013 recorded the lowest proportion of household investment to GDP in this period, at 7.7%. In December quarter 2014, household capital investment was 8.6% of GDP.

General government capital investment as a proportion of GDP remained steady at around 3.0% through the 2000s, with a recent peak of 4.6% in March 2010. It was 3.2% in December quarter 2014.