International investment position
In the second quarter, the net international investment position (i.i.p.) rose by €38 billion to €2.1 trillion; that equates to 61% of gross domestic product (GDP). German claims on non-residents now stand at €10.6 trillion. This compares to German liabilities amounting to €8.5 trillion.
With the publication of the current data, a methodical change for liabilities arising from shares is applied retroactively going back to the final quarter of 2005. The new method of calculation is less susceptible to distortions caused by strong fluctuations in share prices, while the previous method had strongly understated the share holdings of non-residents in recent years in particular. The new method reduces Germany’s statistically recorded net position for year-end 2020 by around €500 billion compared with the prior calculation.
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 those 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).