International investment position: three-dimensional account system presenting changes in net external assets
In the income account, the current account balance, including investment income as well as valuation effects and effects stemming from financial derivatives, led to surpluses. There were also comparatively large positive inflows as a result of other adjustments. On balance, the i.i.p. increased by €178 billion.
The instrument account showed, on balance, very strong inflows into portfolio investment as well as more moderate growth overall in direct investment, financial derivatives, other investment and reserve assets. Looking at portfolio investment and direct investment, the main factors responsible for net growth, alongside transactions and exchange rate effects, were other adjustments. Other investment was driven primarily by financial account transactions as well as exchange rate effects that were counteracted by negative other adjustments. Reserve assets benefited from positive movements in the price of gold, as in the previous quarter.
In the sector account, the Bundesbank’s net external claims recorded the largest growth, mainly in the other investment and reserve assets items. The net external position of financial corporations excluding MFIs and of non-financial corporations, households and non-profit institutions serving households likewise recorded comparatively strong growth on balance, which was primarily attributable to positive market price developments for securities. By contrast, net external claims of monetary financial institutions (MFIs) and government 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.