Germany’s net international investment position (i.i.p.) rose by €58 billion in the third 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, led to surpluses, which contrasted with negative valuation effects and the negative effects of financial derivatives. There were also positive inflows as a result of other adjustments. On balance, the international investment position (i.i.p.) increased by €58 billion.

The instrument account shows strong inflows in other investment and direct investment, while portfolio investment and financial derivatives declined. Reserve assets increased slightly. The gains in direct investment and other investment were mainly the result of financial account transactions as well as exchange rate effects. In portfolio investment, market price effects, in particular, had a dampening effect. Reserve assets benefited from movements in exchange rates and the price of gold. 

In the sector account, the “non-financial corporations, households and non-profit institutions serving households” sector recorded the largest growth on balance. In addition to inflows in direct investment and other investment, this sector registered growth in portfolio investment in particular. 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.