International investment position
The driving force behind the declines is, both then and now, related to valuation effects (excluding financial derivatives). At the current end, the euro’s strong recovery has been reflected in high negative net exchange rate effects in the international investment position (i.i.p.), which, taken in isolation, reduced net external assets by €146 billion in the final quarter of 2022 and by €34 billion in the reporting quarter. This is not offset by any significant net market price effects that would be able to compensate for these declines. Around the turn of 2014-15, the sharp decline came from market price effects, whilst at the same time, positive exchange rate effects (taken in net terms in each case) were able to somewhat mitigate the negative overall effect
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).
Associated tables
Press releases
-
-
Germany’s international investment position at the end of 2021
At the end of December 2021, Germany’s net external assets stood at €2,545 billion, thus amounting to around 71% of nominal gross domestic product (GDP). Both German claims and liabilities vis-à-vis non-residents continued to rise in 2021.
-