International investment position
At €47 billion, net international investment position growth in the second quarter of 2019 was comparatively low: after the record increase of the previous quarter, valuation effects dampened momentum in the current quarter. The net i.i.p. now amounts to € 2.2 trillion, or 66% of gross domestic product (GDP).
When the European monetary union was launched at the start of 1999, Germany had a net foreign liability position.
A glance at the gross figures indicates that German creditors hold €9,298 billion worth of foreign assets, while Germany’s foreign liabilities stand at €7,053 billion. As a result, Germany’s external assets and liabilities currently add up to almost five times its GDP. This ratio, which is used to describe an economy’s financial openness, grew fairly steadily until 2012 and has since remained at a high level.
An economy’s i.i.p. captures the marked-to-market financial assets and liabilities of residents vis-à-vis non-residents at the end of each quarter. Thus, the i.i.p. provides information not only on the volume and structure of financial assets held abroad by residents, but also on financial assets held in Germany by non-residents. The net i.i.p. as a percentage of GDP is a key indicator in the EU’s macroeconomic imbalance procedure (MIP).