The latest edition of Special Statistical Publication 10 “Foreign direct investment stock statistics” giving cross-border corporate assets as at the end of 2006 has just been published on our website ("Internal links"). This special publication is an insertion to our Statistical Supplement 3 “Balance of payments statistics” and is available in printed form from our Press Office.

Cross-border capital links in 2006 increased significantly over the year, with the stock of primary German direct investment abroad rising by €55 billion to €728 billion by the end of the year. At the same time, the level of primary foreign direct investment in Germany increased by €46 billion to €588 billion. While German FDI abroad grew as a result of many new investment projects and foreign affiliates’ good performance, the increase in inward direct investment was due primarily to the extension of credit from affiliated foreign enterprises. In both cases, the capital links were strengthened in particular with regard to European countries (by €46 billion and €39 billion respectively). It must be remembered, however, that the US dollar depreciated by more than 10% against the euro during 2006. This means that, on the one hand, German FDI in the United States sustained corresponding losses in value while, on the other, corporate acquisitions in Germany became more expensive for US investors.

If primary direct investment is broken down by the sector of economic activity of the direct investment enterprises, the main increase in FDI was in holding companies (€35 billion and €25 billion respectively). However, it is worth looking beyond these holding companies to ascertain the actual investment object. The correspondingly consolidated aggregate of primary and secondary foreign direct investment increased in 2006 by €25 billion to €811 billion in the case of outward FDI and by as much as €36 billion to €439 billion in the case of inward FDI. The aforementioned depreciation of the US dollar against the euro is particularly evident in these figures; this alone resulted in an almost 10% net decline in Germany’s consolidated primary and secondary FDI in the United States to €212 billion.