Research-Note-The-Mystery-of-the-52-Billion-Gift

The average annual rao starng with the June quarter 2009 and ending with the September quarter 2023 is 3.5% of GDP.2 The scale of the cumulave funding need is large. [...] Table 1: The puzzle - why did the Net International Investment position (NIIP) not decline by more? Period Dec Qtr Required net capital to fund the current account June Qtr 2009- 2021 to deficit compared to the actual change in the NIIP Sept Qtr 2023 Sept 2023 (inclusive) (inclusive) $ million Cumuluative current account deficit (+)in the BoP $158,134 $61,715 Decline (-) in NIIP -$32,255 -$25,379. [...] 2 The sole reason for picking the end of March 2009 as the starng point is that the Net Internaonal Investment Posion (NIIP) was then, at 84.3% of GDP, the most negave it has been relave to GDP in stascs going back to June 2000. [...] Overall, valuaon gains of $47 billion in the longer period reduced the decline in the NIIP from a potenal $79 billion to $32 billion. [...] 7 Conclusions The mystery of the relavely small decline in the NIIP since 2009 reflects the following fortuitous circumstances: • The advent of large inflows of capital from global reinsurers to fund losses from natural disasters in New Zealand.