Germany’s net international investment position (i.i.p.) rose by €86 billion in the third quarter of 2024. The three-dimensional account system analyses the change in the net i.i.p. from different perspectives.

In the income account, other adjustments and the current account balance, including investment income, led to surpluses. By contrast, valuation effects and effects stemming from financial derivatives generated deficits.

The instrument account showed, on balance, strong inflows into other investment as well as a tendency towards moderate inflows into portfolio investment and reserve assets. Financial derivatives recorded only marginal inflows on balance. Direct investment saw net outflows, mainly owing to negative exchange rate effects. Looking at other investment, transactions were the main drivers of net inflows. The development in portfolio investment was driven mainly by other adjustments and transactions, which were counteracted by negative market price and exchange rate effects of capital movements. Reserve assets benefited from positive movements in the price of gold, as in the previous quarter.

In the sector account, the net external claims of monetary financial institutions (MFIs) recorded the largest inflows, followed by financial corporations (excluding MFIs). By contrast, non-financial corporations, households and non-profit institutions serving households recorded only marginal inflows. The net external position of the government sector recorded the largest outflows, while the Bundesbank’s net external claims also declined on balance, albeit to a lesser extent.

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.