Germany’s net international investment position (i.i.p.) rose by €114 billion in the second quarter of 2024. The three-dimensional account system analyses the change in the net i.i.p. from different perspectives.

In the income account, the current account balance, including investment income as well as valuation effects, led to surpluses. By contrast, effects stemming from financial derivatives and from other adjustments generated deficits. On balance, the i.i.p. increased by €114 billion.

The instrument account showed, on balance, very strong inflows into portfolio investment as well as more moderate growth in direct investment, reserve assets and other investment. There were outflows from financial derivatives. While growth in securities investments was mainly attributable to market price effects and other adjustments, the net rise in direct investment was driven, in particular, by transactions, alongside market price and exchange rate effects. Growth in other investment was driven primarily by financial account transactions yet counteracted by other adjustments. Reserve assets benefited from positive movements in the price of gold, as in the previous quarter. For financial derivatives, transactions were positive, but this effect was outweighed by negative market price developments.

In the sector account, non-financial corporations, households and non-profit institutions serving households recorded the largest growth. The Bundesbank accounted for the second largest share of the overall increase. Monetary financial institutions (MFIs) also recorded slight net growth. By contrast, the net external position of financial corporations excluding MFIs and of the general government sector declined slightly on balance.

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.