Net Foreign Assets in 2025: Australia’s Global Financial Pulse

Net Foreign Assets (NFA) might sound like a technical term for economists, but in 2025, it’s more relevant than ever for Australians tracking the nation’s financial wellbeing. From the value of our dollar to the returns on super funds, NFA is a critical indicator of how Australia stands in the global economic landscape.

Understanding Net Foreign Assets: More Than Just Numbers

At its core, NFA measures the difference between what Australians own abroad (like investments, property, or company stakes) and what foreign entities own here. A positive NFA means Australia is a net lender to the rest of the world; a negative NFA means we’re a net borrower. The figure is updated quarterly by the Australian Bureau of Statistics and closely monitored by the Reserve Bank of Australia (RBA).

• Positive NFA: Australia has more assets overseas than debts owed to foreigners. This boosts national income and financial security.
• Negative NFA: Australia owes more to the world than it owns abroad, increasing vulnerability to global shocks and currency swings.

As of early 2025, Australia’s NFA remains negative, but recent trends show a narrowing gap thanks to robust export earnings and prudent investment policies.

2025 Policy Shifts and Their Impact on NFA

This year, several key developments are shaping Australia’s NFA trajectory:

• Stronger Commodity Exports: High prices for lithium, iron ore, and agricultural goods have improved Australia’s current account, supporting NFA improvement.
• Superannuation Funds Investing Overseas: With over $3.7 trillion in super assets, Australian funds are allocating more capital to global markets. While this diversifies returns, it also increases foreign assets, offsetting some of the liabilities.
• Foreign Investment Review Board (FIRB) Rules: Tighter screening of foreign ownership in critical sectors (energy, tech) is curbing rapid increases in foreign liabilities.
• Interest Rate Environment: The RBA’s cautious approach to rate cuts in 2025 is supporting the Australian dollar, helping manage the cost of foreign debt repayments.

For example, the government’s 2025 Budget included incentives for super funds to invest in domestic infrastructure, aiming to redirect some capital from overseas markets and further stabilise the NFA position.

Why NFA Matters for Investors, Households, and Policymakers

NFA isn’t just a statistic for economists—it has real-world effects:

• Currency Strength: A healthier NFA supports a stronger Australian dollar, making imports cheaper and overseas travel more affordable for households.
• Interest Rates: Persistent negative NFA can pressure borrowing costs higher, as international lenders demand compensation for perceived risk.
• Investment Returns: Super funds with significant offshore holdings are exposed to currency and geopolitical risks. Positive NFA trends can boost confidence in local markets.
• Economic Sovereignty: High foreign ownership in critical industries can trigger policy responses to protect national interests, as seen in the 2025 FIRB reforms.

For instance, the RBA’s latest Financial Stability Review noted that a modest improvement in NFA has helped shield Australia from the worst of global volatility, even as interest rates in the US and Europe remain uncertain.

Looking Ahead: The Role of NFA in Australia’s Economic Story

In 2025, NFA stands at the crossroads of Australia’s economic ambitions and global responsibilities. As super funds grow and policy continues to pivot toward domestic investment, the nation’s net position could gradually improve—bolstering resilience against future shocks.

Households and investors should pay attention to NFA trends, as they influence the cost of living, investment returns, and even job opportunities tied to foreign-owned companies.