Net Capital Outflow

Net capital outflow refers to the net movement of financial capital from a country to other countries.It represents the difference between the acquisition of foreign assets by domestic residents and the acquisition of domestic assets by foreign residents. A positive net capital outflow means that domestic investors are investing more abroad than foreign investors are investing in the domestic economy, while a negative outflow indicates the opposite.

Example

If U.S. investors purchase $500 billion in foreign assets while foreign investors buy $300 billion in U.S. assets, the net capital outflow from the U.S. would be $200 billion.