A worrying $52 billion discrepancy

• From Kiwiblog’s David Farrar –

Bryce Wilkinson writes:

Senior Fellow Bryce Wilkinson’s analysis reveals that since March 2009, New Zealand has spent $158 billion more overseas than it has earned, but its NIIP has only fallen by $32 billion.

Statistics New Zealand shows that receipts from overseas reinsurers have made a significant contribution to funding that $158 billion.

“We do not want more natural disasters, so we can hope this source of funding is temporary”, says Dr Wilkinson.

But the big mystery is who has been funding the $52 billion that Statistics New Zealand has had to attribute to “errors and omissions”. This discrepancy is even more pronounced in the past two years, with $36 billion of the $62 billion current account deficit seemingly funded by mysterious sources.

I had no idea there was such a mismatch between our current account deficit and our balance sheet.

There should be serious work undertaken by Statistics NZ to try and reduce this discrepancy. $52 billion is too large an error, even over many years.

• NOTE: NIIP is the abbreviation for net international investment position.

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This article by David Farrar was first published on Kiwiblog