International investment position: three-dimensional account system presenting changes in net external assets
Germany’s net i.i.p. rose by €64 billion in 2020. The three-dimensional presentation concept analyses the change in the net i.i.p. from different perspectives.
The current account including investment income once again made the largest contribution to the income account in 2020, even though the surplus was lower than in the previous year on account of the pandemic. In terms of valuation effects, high market price gains were offset by negative exchange rate effects of the same magnitude.
The instrument account only showed comparatively minor shifts between the functional categories. Portfolio investment was virtually unchanged as the significant changes in assets and liabilities cancelled each other out here. The increase in other investment was attributable to the Bundesbank’s TARGET2 claims.
This is reflected in the sector account by a correspondingly high increase in the Bundesbank’s external position. The increase experienced by financial corporations (excluding monetary financial institutions (MFIs)) and the non-financial corporations sector, households, and non-profit institutions serving households was fostered by positive valuation effects. In the case of general government, by contrast, negative valuation effects and transactions reduced the position, whilst among MFIs, a transaction-related rise in external debt determined the result.
The three-dimensional account system analyses changes in the net i.i.p. from a range of perspectives: the income account establishes the link to balance of payments transactions and adds to valuation effects and other adjustments, the instrument account shows how changes in the net i.i.p. are reflected in the various functional categories of financial assets, and the sector account considers the domestic sectors involved.