Wealth of nations: why it matters for policy makers and investors

A more complete picture of a country's net worth that includes the value of national assets and liabilities would facilitate better-informed policy decisions and sovereign risk assessment.

Key takeaways:

  • Integrated reporting incorporating "net assets" provides a more complete view of a country's financial health than debt-to-GDP.
  • Spend smarter: governments can earn about 3% of GDP in new revenue if they know what they own and how to put assets to better use.
  • The information can help countries with weaker balance sheets to better manage their typically deeper recessions and slow recoveries.
  • Net worth reporting would also give investors an additional yardstick to assess sovereign risk.
  • To date, only New Zealand systematically reports net worth.

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