International investment position: three-dimensional account system presenting changes in net external assets
Germany’s net international investment position (i.i.p.) rose by €37.6 billion in the second quarter of 2021. The three-dimensional account system analyses change in the net i.i.p. from different perspectives.
In the income account, the current account balance (excluding investment income) and valuation effects make contributions of a similar magnitude to growth, while the other adjustments have a sharply dampening effect.
In the instrument account, portfolio investment recorded the largest growth, driven both by transactions and by positive market price effects. Other investment saw the largest decline. This can be attributed to large deposits by non-resident credit institutions with German banks and the Bundesbank.
Looking at the sector account, financial corporations (excluding monetary financial institutions, MFIs) were the biggest winners, as they benefited particularly from the increase in portfolio investment. Credit institutions’ net external position, meanwhile, has declined, and general government and the Bundesbank both recorded declines in the single-digit billion euro range.
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.