U.S. Net International Investment Position

Fourth Quarter and Year 2018

By Elena L. Nguyen and Erin M. Whitaker  |  Volume 99, Number 4  |  April 16, 2019

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The U.S. net international investment position—the value of U.S. assets less the value of U.S. liabilities—decreased to −$9,717.1 billion (preliminary) at the end of the fourth quarter of 2018 from −$9,634.8 billion (revised) at the end of the third quarter (chart 1).

For the year 2018, the U.S. net international investment position decreased $1,992.1 billion from −$7,725.0 billion at the end of 2017 (chart 1).

The U.S. international investment position is a statistical balance sheet that presents the dollar value of U.S. external financial assets and liabilities at a specific point in time. The negative net investment position represents a U.S. net liability to the rest of the world.

Fourth-quarter highlights

  • The net investment position decreased $82.4 billion in the fourth quarter, reflecting a $1,695.4 billion decrease in U.S. assets and a $1,613.0 billion decrease in U.S. liabilities. The decrease also reflected net financial transactions of −$199.2 billion and net other changes in position, such as price and exchange-rate changes, of $116.8 billion (table A).
  • The net investment position decreased 0.9 percent in the fourth quarter, compared with a decrease of 8.9 percent in the third quarter and an average quarterly decrease of 4.7 percent from the first quarter of 2011 through the second quarter of 2018.

Year 2018 highlights

  • The net investment position decreased $1,992.1 billion in 2018, reflecting a $2,400.5 billion decrease in U.S. assets and a $408.4 billion decrease in U.S. liabilities. The decrease also reflected net financial transactions of −$519.6 billion and net other changes in position, such as price and exchange-rate changes, of −$1,472.6 billion (table E).
  • The net investment position decreased 25.8 percent in 2018, compared with an increase of 5.6 percent in 2017.
Chart 1. U.S. Net International Investment Position, line chart

[Click chart to expand]

 

 

Table A. Quarterly Change in the U.S. Net International Investment Position
[Billions of dollars, not seasonally adjusted]
Type of investment Position, 2018:III Change in position in 2018:IV Position, 2018:IV
Total Attributable to:
Financial transactions Other changes in position 1
U.S. net international investment position −9,634.8 −82.4 −199.2 116.8 −9,717.1
Net position excluding financial derivatives −9,692.0 −56.0 −179.1 123.2 −9,747.9
Financial derivatives other than reserves, net 2 57.2 −26.4 −20.1 −6.3 30.8
U.S. assets 27,094.0 −1,695.4 (2) (2) 25,398.6
Assets excluding financial derivatives 25,594.7 −1,942.1 136.5 −2,078.6 23,652.6
Financial derivatives other than reserves 1,499.2 246.7 (2) (2) 1,746.0
U.S. liabilities 36,728.7 −1,613.0 (2) (2) 35,115.7
Liabilities excluding financial derivatives 35,286.7 −1,886.2 315.6 −2,201.8 33,400.5
Financial derivatives other than reserves 1,442.0 273.1 (2) (2) 1,715.2
  1. Disaggregation of other changes in position into price changes, exchange-rate changes, and other changes in volume and valuation is only presented for annual statistics released in June each year.
  2. Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

Note. The statistics on positions are presented in table 1.2 of the international investment position (IIP) accounts on BEA’s website. The statistics on financial transactions are not seasonally adjusted and are presented in table 1.2 of the international transactions accounts (ITAs) on BEA’s website.

U.S. assets decreased $1,695.4 billion to $25,398.6 billion at the end of the fourth quarter, reflecting decreases in portfolio investment and direct investment assets that were partly offset by increases in financial derivatives, other investment, and reserve assets (chart 2, table B).

  • Assets excluding financial derivatives decreased $1,942.1 billion to $23,652.6 billion. The decrease resulted from financial transactions of $136.5 billion and other changes in position of −$2,078.6 billion.
    • Financial transactions reflected net U.S. acquisition of other investment deposit and loan assets and of direct investment equity assets that were partly offset by net U.S. sales of foreign securities.
    • Other changes in position were driven by foreign stock price decreases that lowered the equity value of portfolio investment and direct investment assets.
  • Financial derivatives increased $246.7 billion to $1,746.0 billion, reflecting increases in single-currency interest rate contracts.
Chart 2. U.S. Assets, line chart

[Click chart to expand]

Table B. Quarterly Change in U.S. Assets
[Billions of dollars, not seasonally adjusted]
Type of investment Position, 2018:III Change in position in 2018:IV Position, 2018:IV
Total Attributable to:
Financial transactions Other changes in position 1
U.S. assets 27,094.0 −1,695.4 (2) (2) 25,398.6
Assets excluding financial derivatives 25,594.7 −1,942.1 136.5 −2,078.6 23,652.6
Financial derivatives other than reserves 1,499.2 246.7 (2) (2) 1,746.0
By functional category:          
Direct investment at market value 8,451.3 −922.9 60.7 −983.6 7,528.4
Equity 7,201.5 −925.5 62.0 −987.5 6,276.0
Debt instruments 1,249.8 2.6 −1.3 3.9 1,252.3
Portfolio investment 12,543.2 −1,262.1 −149.6 −1,112.6 11,281.1
Equity and investment fund shares 8,988.6 −1,162.4 −65.1 −1,097.3 7,826.2
Debt securities 3,554.7 −99.7 −84.5 −15.3 3,454.9
Short term 699.9 −33.9 −34.2 0.3 666.0
Long term 2,854.7 −65.8 −50.3 −15.6 2,788.9
Financial derivatives other than reserves 1,499.2 246.7 (2) (2) 1,746.0
Over-the-counter contracts 1,435.9 251.6 (2) (2) 1,687.5
Single-currency interest rate contracts 958.5 249.2 (2) (2) 1,207.8
Foreign exchange contracts 301.8 2.1 (2) (2) 303.8
Other contracts 175.6 0.3 (2) (2) 175.9
Exchange-traded contracts 63.3 −4.9 (2) (2) 58.4
Other investment 4,177.2 216.8 223.2 −6.4 4,394.0
Currency and deposits 1,768.6 138.8 143.5 −4.7 1,907.5
Loans 2,358.1 76.2 77.7 −1.6 2,434.3
Insurance technical reserves n.a. n.a. n.a. n.a. n.a.
Trade credit and advances 50.4 1.9 2.0 −0.1 52.3
Reserve assets 423.0 26.0 2.1 23.9 449.1
Monetary gold 310.5 24.0 0.0 24.0 334.5
Special drawing rights 50.9 −0.1 (*) −0.2 50.8
Reserve position in the International Monetary Fund 20.0 2.0 2.0 −0.1 22.0
Other reserve assets 41.6 0.2 (*) 0.2 41.8
n.a.
Not available
(*)
Value between zero and +/− $50 million
  1. Disaggregation of other changes in position into price changes, exchange-rate changes, and other changes in volume and valuation is only presented for annual statistics released in June each year.
  2. Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

Note. The statistics on positions are presented in table 1.2 of the international investment position (IIP) accounts on BEA’s website. The statistics on financial transactions are not seasonally adjusted and are presented in table 1.2 of the international transactions accounts (ITAs) on BEA’s website.

U.S. liabilities decreased $1,613.0 billion to $35,115.7 billion at the end of the fourth quarter, reflecting decreases in portfolio investment and direct investment liabilities that were partly offset by increases in other investment liabilities and financial derivatives (chart 3, table C).

  • Liabilities excluding financial derivatives decreased $1,886.2 billion to $33,400.5 billion. The decrease resulted from financial transactions of $315.6 billion and other changes in position of −$2,201.8 billion.
    • Financial transactions reflected net U.S. incurrence of other investment loan and deposit liabilities and of direct investment equity liabilities that were partly offset by net foreign sales of U.S. securities, especially of U.S. long-term debt.
    • Other changes in position were driven by U.S. stock price decreases that lowered the equity value of portfolio investment and direct investment liabilities.
  • Financial derivatives increased $273.1 billion to $1,715.2 billion, reflecting increases in single-currency interest rate contracts.
Chart 3. U.S. Liabilities, line chart

[Click chart to expand]

Table C. Quarterly Change in U.S. Liabilities
[Billions of dollars, not seasonally adjusted]
Type of investment Position, 2018:III Change in position in 2018:IV Position, 2018:IV
Total Attributable to:
Financial transactions Other changes in position 1
U.S. liabilities 36,728.7 −1,613.0 (2) (2) 35,115.7
Liabilities excluding financial derivatives 35,286.7 −1,886.2 315.6 −2,201.8 33,400.5
Financial derivatives other than reserves 1,442.0 273.1 (2) (2) 1,715.2
By functional category:          
Direct investment at market value 9,583.2 −1,064.8 83.6 −1,148.4 8,518.4
Equity 7,855.1 −1,057.5 95.0 −1,152.5 6,797.6
Debt instruments 1,728.1 −7.3 −11.4 4.1 1,720.8
Portfolio investment 19,882.9 −1,144.9 −12.9 −1,132.0 18,738.1
Equity and investment fund shares 8,561.6 −1,107.9 88.2 −1,196.0 7,453.7
Debt securities 11,321.4 −37.0 −101.0 64.0 11,284.4
Short term 967.1 12.9 13.1 −0.2 980.0
Long term 10,354.3 −49.9 −114.1 64.2 10,304.4
Financial derivatives other than reserves 1,442.0 273.1 (2) (2) 1,715.2
Over-the-counter contracts 1,385.6 269.5 (2) (2) 1,655.1
Single-currency interest rate contracts 917.4 264.8 (2) (2) 1,182.2
Foreign exchange contracts 290.7 8.6 (2) (2) 299.3
Other contracts 177.5 −3.9 (2) (2) 173.6
Exchange-traded contracts 56.4 3.6 (2) (2) 60.0
Other investment 5,820.6 323.5 244.9 78.6 6,144.1
Currency and deposits 3,152.6 102.8 104.6 −1.8 3,255.4
Loans 2,418.7 222.4 141.8 80.6 2,641.1
Insurance technical reserves n.a. n.a. n.a. n.a. n.a.
Trade credit and advances 200.0 −1.6 −1.5 −0.1 198.5
Special drawing rights allocations 49.3 −0.2 0.0 −0.2 49.1
n.a.
Not available
  1. Disaggregation of other changes in position into price changes, exchange-rate changes, and other changes in volume and valuation is only presented for annual statistics released in June each year.
  2. Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

Note. The statistics on positions are presented in table 1.2 of the international investment position (IIP) accounts on BEA’s website. The statistics on financial transactions are not seasonally adjusted and are presented in table 1.2 of the international transactions accounts (ITAs) on BEA’s website.

The U.S. net international investment position statistics for the third quarter of 2018 have been updated to incorporate newly available and revised source data (table D).

Table D. Updates to Third-Quarter 2018 International Investment Position Aggregates
[Billions of dollars, not seasonally adjusted]
  Preliminary estimate Revised estimate
U.S. net international investment position −9,627.2 −9,634.8
U.S. assets 27,150.7 27,094.0
Direct investment at market value 8,468.6 8,451.3
Portfolio investment 12,558.8 12,543.2
Financial derivatives other than reserves 1,499.2 1,499.2
Other investment 4,201.1 4,177.2
Reserve assets 423.0 423.0
U.S. liabilities 36,777.9 36,728.7
Direct investment at market value 9,591.1 9,583.2
Portfolio investment 19,882.9 19,882.9
Financial derivatives other than reserves 1,442.0 1,442.0
Other investment 5,861.9 5,820.6

 

 

The U.S. net international investment position decreased to −$9,717.1 billion (preliminary) at the end of 2018 from −$7,725.0 billion at the end of 2017 (table E). The $1,992.1 billion decrease reflected a $2,400.5 billion decrease in U.S. assets and a $408.4 billion decrease in U.S. liabilities.

U.S. assets decreased $2,400.5 billion to $25,398.6 billion at the end of 2018, reflecting decreases in direct investment and portfolio investment assets that were partly offset by increases in financial derivatives and other investment assets (table E).

  • Assets excluding financial derivatives decreased $2,524.0 billion to $23,652.6 billion. The decrease resulted from financial transactions of $301.6 billion and other changes in position of −$2,825.6 billion.
    • Financial transactions reflected net U.S. purchases of foreign securities and net U.S. acquisition of other investment deposit assets that were partly offset by net U.S. withdrawal of direct investment equity assets. The net withdrawal of direct investment equity assets reflected U.S. parent repatriation of previously reinvested earnings in response to the Tax Cuts and Jobs Act. For more information, see the box “Effects of the 2017 Tax Cuts and Jobs Act on U.S. Direct Investment Assets.”
    • Other changes in position mostly reflected foreign stock price decreases that lowered the equity value of portfolio investment and direct investment assets, and to a lesser extent, the depreciation of major foreign currencies against the U.S. dollar that lowered the value of foreign-currency-denominated assets in dollar terms.
  • Financial derivatives increased $123.5 billion to $1,746.0 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.
Table E. Annual Change in the U.S. Net International Investment Position and in U.S. Assets
[Billions of dollars]
Type of investment Yearend position, 2017 Change in position in 2018 Yearend position, 2018
Total Attributable to:
Financial transactions Other changes in position 1
U.S. net international investment position −7,725.0 −1,992.1 −519.6 −1,472.6 −9,717.1
Net position excluding financial derivatives −7,753.3 −1,994.7 −499.3 −1,495.4 −9,747.9
Financial derivatives other than reserves, net 28.3 2.5 −20.3 22.8 30.8
U.S. assets 27,799.1 −2,400.5 (2) (2) 25,398.6
Assets excluding financial derivatives 26,176.6 −2,524.0 301.6 −2,825.6 23,652.6
Financial derivatives other than reserves 1,622.5 123.5 (2) (2) 1,746.0
By functional category:          
Direct investment at market value 8,910.0 −1,381.6 −50.6 −1,331.0 7,528.4
Equity 7,645.9 −1,369.8 −58.5 −1,311.3 6,276.0
Debt instruments 1,264.1 −11.8 7.9 −19.7 1,252.3
Portfolio investment 12,543.8 −1,262.7 210.3 −1,473.1 11,281.1
Equity and investment fund shares 9,129.5 −1,303.3 97.2 −1,400.5 7,826.2
Debt securities 3,414.4 40.6 113.2 −72.6 3,454.9
Short term 649.8 16.2 17.6 −1.4 666.0
Long term 2,764.6 24.3 95.6 −71.2 2,788.9
Financial derivatives other than reserves 1,622.5 123.5 (2) (2) 1,746.0
Over-the-counter contracts 1,582.0 105.6 (2) (2) 1,687.5
Single-currency interest rate contracts 1,150.5 57.2 (2) (2) 1,207.8
Foreign exchange contracts 261.3 42.5 (2) (2) 303.8
Other contracts 170.1 5.8 (2) (2) 175.9
Exchange-traded contracts 40.5 17.9 (2) (2) 58.4
Other investment 4,273.0 121.0 136.9 −15.9 4,394.0
Currency and deposits 1,774.9 132.6 151.8 −19.3 1,907.5
Loans 2,446.4 −12.1 −15.7 3.6 2,434.3
Insurance technical reserves n.a. n.a. n.a. n.a. n.a.
Trade credit and advances 51.8 0.5 0.8 −0.3 52.3
Reserve assets 449.7 −0.6 5.0 −5.6 449.1
Monetary gold 337.6 −3.1 0.0 −3.1 334.5
Special drawing rights 51.9 −1.1 0.2 −1.2 50.8
Reserve position in the International Monetary Fund 17.6 4.4 4.8 −0.4 22.0
Other reserve assets 42.6 −0.8 (*) −0.8 41.8
n.a.
Not available
(*)
Value between zero and +/− $50 million
  1. Disaggregation of other changes in position into price changes, exchange-rate changes, and other changes in volume and valuation is only presented for annual statistics released in June each year.
  2. Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

Note. The statistics on positions are presented in table 1.2 of the international investment position (IIP) accounts on BEA’s website. The statistics on financial transactions are presented in table 1.2 of the international transactions accounts (ITAs) on BEA’s website.

 

U.S. liabilities decreased $408.4 billion to $35,115.7 billion at the end of 2018, reflecting decreases in portfolio investment and direct investment liabilities that were partly offset by increases in other investment liabilities and financial derivatives (table F).

  • Liabilities excluding financial derivatives decreased $529.3 billion to $33,400.5 billion. The decrease resulted from financial transactions of $800.9 billion and other changes in position of −$1,330.2 billion.
    • Financial transactions reflected net incurrence of liabilities in all major investment categories.
    • Other changes in position mostly reflected U.S. stock price decreases that lowered the equity value of portfolio investment and direct investment liabilities.
  • Financial derivatives increased $120.9 billion to $1,715.2 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.
Table F. Annual Change in U.S. Liabilities
[Billions of dollars]
Type of investment Yearend position, 2017 Change in position in 2018 Yearend position, 2018
Total Attributable to:
Financial transactions Other changes in position 1
U.S. liabilities 35,524.1 −408.4 (2) (2) 35,115.7
Liabilities excluding financial derivatives 33,929.8 −529.3 800.9 −1,330.2 33,400.5
Financial derivatives other than reserves 1,594.2 120.9 (2) (2) 1,715.2
By functional category:          
Direct investment at market value 8,925.5 −407.1 267.1 −674.2 8,518.4
Equity 7,132.8 −335.2 332.2 −667.5 6,797.6
Debt instruments 1,792.6 −71.8 −65.1 −6.7 1,720.8
Portfolio investment 19,482.2 −744.1 320.0 −1,064.1 18,738.1
Equity and investment fund shares 7,951.9 −498.2 147.2 −645.4 7,453.7
Debt securities 11,530.3 −245.9 172.8 −418.7 11,284.4
Short term 959.2 20.8 28.8 −8.0 980.0
Long term 10,571.1 −266.7 144.0 −410.7 10,304.4
Financial derivatives other than reserves 1,594.2 120.9 (2) (2) 1,715.2
Over-the-counter contracts 1,554.4 100.8 (2) (2) 1,655.1
Single-currency interest rate contracts 1,112.6 69.7 (2) (2) 1,182.2
Foreign exchange contracts 266.8 32.5 (2) (2) 299.3
Other contracts 175.1 −1.4 (2) (2) 173.6
Exchange-traded contracts 39.9 20.2 (2) (2) 60.0
Other investment 5,522.2 621.9 213.8 408.1 6,144.1
Currency and deposits 3,196.6 58.8 29.6 29.2 3,255.4
Loans 2,091.1 550.0 169.7 380.3 2,641.1
Insurance technical reserves n.a. n.a. n.a. n.a. n.a.
Trade credit and advances 184.2 14.3 14.5 −0.2 198.5
Special drawing rights allocations 50.3 −1.2 0.0 −1.2 49.1
n.a.
Not available
  1. Disaggregation of other changes in position into price changes, exchange-rate changes, and other changes in volume and valuation is only presented for annual statistics released in June each year.
  2. Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

Note. The statistics on positions are presented in table 1.2 of the international investment position (IIP) accounts on BEA’s website. The statistics on financial transactions are presented in table 1.2 of the international transactions accounts (ITAs) on BEA’s website.