Finance Minister and Acting Treasurer Rt Hon Bill Birch said the increase in total overseas debt would be addressed by improving economic growth and by increased saving in the private sector.
"The debt figures reflect the same trend as the current account - high private sector borrowing offshore.
"The corporate sector borrowed an extra $13.9 billion in the year to March, and the stock of corporate overseas debt increased by another $6.2 billion because of the depreciation in the New Zealand dollar.
"Official sector debt (Crown debt excluding SOEs) on the other hand, reduced by $700 million proving the worth of the Government's commitment to running surpluses and repaying debt."
Mr Birch said it was crucial at this time that the Government continued to run surpluses and reduce public debt.
"We have to lead the way in saving. Labour's suggestion that governments should be relaxed about increasing debt is ridiculous.
"The other thing the Government must keep doing is ensure that our economic framework continues to encourage productive investment.
"Businesses obviously don't borrow for the sake of it. They borrow to fund investment and business expansion. Businesses expect to see a return on their investment - as do the lending institutions.
"More than half of the increase in corporate debt is non-bank borrowing - clearly for business investment.
"We should make sure that nothing prevents investment moving into the most productive sectors of the economy."
Mr Birch said the depreciation in the NZ dollar, while adding to the stock of foreign denominated overseas debt, would also drive an improvement in the current account and debt position.
"The lower dollar will benefit exporters leading to a larger trade surplus, and higher interest rates will dampen household activities and reduce mortgage borrowing."