Net Foreign Investment

Let’s say Japan is investing a gazillion-and-one yen overseas...and foreign countries are investing one-gazillion yen in Japan. Japan’s net foreign investment would be one, single, lonely yen.

Net foreign investment is the total foreign investment value from a country, minus the investment from foreign entities in their own country. As the name implies, it’s the difference between how much a country is investing abroad vs. how much other countries are investing in them.

A positive net foreign investment means a country is investing more than it’s being invested in, meaning it’s a global net lender. Negative net foreign investment means it’s rolling in investments from foreigners within their borders, and doling out less abroad comparatively, making it a net borrower globally.

Can you smell that green…the economic growth? We sure can.