Germany’s net international investment position (i.i.p.) rose by €8 billion in the second quarter of 2023. The three-dimensional account system analyses change in the net i.i.p. from different perspectives.

In the income account, the current account balance, including investment income, and valuation effects led to surpluses, which contrasted with negative amounts of a similar scale caused by other adjustments and the valuation effects of financial derivatives. On balance, the i.i.p. increased only slightly (by €8 billion).

The instrument account shows moderate inflows in direct investment, portfolio investment and other investment, while financial derivatives and reserve assets declined. These were driven mainly by financial account transactions; market price effects also had a positive impact on securities and a negative impact on reserve assets, owing to the relevance of gold holdings.

In the sector account, the financial corporation sector (excluding MFIs) recorded the largest net growth, mainly due to net purchases of foreign bonds and deposits with foreign MFIs. German MFIs’ i.i.p. also increased on balance. Government recorded a further increase in its net liabilities, and the Bundesbank’s net external claims declined.

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.