International investment position and external debt
The data capture residents’ assets and liabilities vis-à-vis non-residents and vice versa. These figures are calculated over time based on balance of payments transactions and valuation changes.
International investment position
Losses incurred due to the coronavirus pandemic are almost recovered: at €34 billion, the net international investment position records a small increase in the third quarter, as it had in the previous quarter. It thus stands at €2.5 trillion and, in absolute terms, is just below the figure recorded before the coronavirus-related slump in the second quarter. This already marks a new high in relation to gross domestic product. As a result of the sharp decline in economic activity, the ratio rises by 2 percentage points to 73%.
Germany's gross foreign debt stood at €5.5 trillion at the end of the third quarter of 2020. The sharp increase in relation to gross domestic product at the current margin is explained by the corona-related decline in economic activity.
The external position of the Bundesbank, International reserves and foreign currceny liquidity of the Eurosystem
Bundesbank’s external position stood at €648 billion as at the end of December 2020, with claims from the TARGET2 payment system worth €1136 billion making up around 79% of total assets. These are followed by international reserves, comprising gold and foreign exchange reserves, including the special drawing rights allocated by the International Monetary Fund (IMF), which account for a total of 12% of assets. At 61%, issuance of euro cash accounted for the bulk of liabilities. Deposits of non-euro area residents amount to 33% of foreign liabilities.
External positions of enterprises from financial operations and trade credits
German enterprises constitute net debtors vis-à-vis non-residents: Standing at €1,387 billion at the end of November 2020, their liabilities arising from financial operations and trade credits, exceeded their corresponding assets of €1,044 billion by €342 billion. Compared with the previous month, this represents a change in the magnitude of -€7 billion.
Indices of exchange rate effects in the international investment position
A notable percentage of the financial assets and liabilities in Germany’s international investment position (i.i.p.) are denominated in a foreign currency. Exchange rate movements therefore have a major impact on the performance of the i.i.p. A specific index concept allows us to assess how the market value of external assets and external debt changes solely as a result of exchange rate movements