Taiwan remained the sixth-largest net creditor nation in the world last year, despite a fall of more than 10 percent in its net international investment position (NIIP) over the year, the central bank said yesterday.

The NIIP is the difference between a country’s external financial assets and its external financial liabilities.

Taiwan’s external financial assets hit US$3.27 trillion at the end of last year, up US$275.75 billion or 9.2 percent from a year earlier, the central bank said in its annual NIIP report.

Photo: CNA

The growth largely reflected an increase in holdings of overseas marketable securities by residents in Taiwan, as well as a spike in the value of the securities, the central bank said.

Meanwhile, Taiwan’s external financial liabilities increased at a much faster pace last year to reach a new high of US$1.92 trillion at the end of last year, soaring US$438.38 billion or 29.6 percent from a year earlier, the central bank said.

The difference between the country’s external financial assets and liabilities reached US$1.35 trillion, the sixth largest in the world and down US $162.63 billion, or 10.8 percent, from a year earlier, it said.

The record external liabilities last year came after a strong showing in the local stock market, led by the bellwether electronics index, which soared 35.55 percent over the year amid the artificial intelligence boom, Tsai Mei-fen (蔡美芬), an official at the central bank’s Department of Economic Research, told reporters.

Foreign institutional investors trimmed their holdings in Taiwan’s stock market with a net fund outflow last year, but high share prices, in particular in the electronics sector, still boosted the value of their holdings, Tsai said.

Foreign institutional investors largely favored Taiwan’s tech stocks with contract chipmaker Taiwan Semiconductor Manufacturing Co (台積電), which accounts for more than 40 percent of total market value, one of their favorites, she said.

Taiwan experienced market conditions similar to those in South Korea last year due to fast-growing stock prices, she added.

The previous record for Taiwan’s NIIP position was seen at the end of 2023, but the figure fell the following year before rebounding last year on the back of a rise in market value held by foreign institutional investors, Tsai said.

Among other countries, Germany took the top net creditor spot with a NIIP of about US$4.32 trillion as of the end of last year, ahead of China with US$4.07 trillion, Japan with US $3.68 trillion, Hong Kong with US$2.51 trillion and Norway with US$2.11 trillion, the central bank said.