A Look at the U.S. International Investment Position

Fourth Quarter and Year 2023

By Erin Whitaker  |  April 4, 2024

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The U.S. net international investment position, the difference between U.S. residents' foreign financial assets and liabilities, was −$19.77 trillion at the end of the fourth quarter of 2023 (chart 1). Assets totaled $34.54 trillion, and liabilities were $54.31 trillion. At the end of the third quarter, the net investment position was −$18.11 trillion (revised). The net investment position and components of assets and liabilities are presented in table A.

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

The −$1.66 trillion change in the net investment position from the third quarter to the fourth quarter came from net financial transactions of –$243.1 billion and net other changes in position, such as price and exchange-rate changes, of −$1.42 trillion. Net other changes mostly reflected U.S. stock price increases that exceeded foreign stock price increases, which raised the market value of U.S. liabilities more than U.S. assets. The impact of stock price changes was partly offset by the appreciation of major foreign currencies against the U.S. dollar that raised the value of U.S. assets more than U.S. liabilities in dollar terms (table A).

At the end of 2023, the U.S. net international investment position was −$19.77 trillion, compared with −$16.17 trillion at the end of 2022 (chart 1). The −$3.60 trillion change in the net investment position from the end of 2022 to the end of 2023 came from net financial transactions of −$906.3 billion and net other changes in position, such as price and exchange-rate changes, of −$2.69 trillion (table C).

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U.S. assets increased by $1.72 trillion to a total of $34.54 trillion at the end of the fourth quarter, driven by foreign stock price increases and the appreciation of major foreign currencies against the U.S. dollar. All major investment categories of assets increased, except financial derivatives (chart 2).

Direct investment assets increased by $930.0 billion to $10.80 trillion, and portfolio investment assets increased by $914.2 billion to $15.32 trillion, driven mainly by foreign stock price increases and the appreciation of major foreign currencies against the U.S. dollar that raised the market value of these assets in dollar terms. Other investment assets increased by $193.9 billion to $5.44 trillion, driven by increases in loans and in currency and deposits.

In contrast, financial derivatives decreased by $380.7 billion to $2.20 trillion, driven by decreases in single-currency interest rate contracts.

Price and exchange-rate changes, which are components of other changes in position, drove the overall increase in U.S. assets (table A).

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U.S. liabilities increased by $3.38 trillion to a total of $54.31 trillion at the end of the fourth quarter, driven by U.S. stock price increases. All major investment categories of liabilities increased, except financial derivatives (chart 3).

Portfolio investment liabilities increased by $2.21 trillion to $28.67 trillion, and direct investment liabilities increased by $1.31 trillion to $14.87 trillion, driven mainly by U.S. stock price increases that raised the market value of these liabilities; U.S. bond price increases also contributed to the increase in portfolio investment liabilities. Other investment liabilities increased by $171.2 billion to $8.57 trillion, driven by increases in currency and deposits.

In contrast, financial derivatives decreased by $312.0 billion to $2.21 trillion, driven by decreases in single-currency interest rate contracts.

Price changes, which is a component of other changes in position, drove the overall increase in U.S. liabilities (table A).

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The U.S. international investment position statistics for the third quarter of 2023 have been updated to incorporate newly available and revised source data (table B).

The U.S. net international investment position was −$19.77 trillion at the end of 2023, compared with −$16.17 trillion at the end of 2022. The net investment position and components of assets and liabilities are presented in table C.

The −$3.60 trillion change in the net investment position from the end of 2022 to the end of 2023 came from net financial transactions of −$906.3 billion and net other changes in position, such as price and exchange-rate changes, of −$2.69 trillion (table C).

Price changes of −$2.93 trillion mostly reflected U.S. stock price increases that exceeded foreign stock price increases, which raised the market value of U.S. liabilities more than U.S. assets.

Exchange-rate changes of $482.4 billion reflected the appreciation of most major foreign currencies against the U.S. dollar, which raised the value of U.S. assets more than U.S. liabilities in dollar terms.

U.S. assets increased by $2.91 trillion to a total of $34.54 trillion at the end of 2023, driven by foreign stock price increases and by financial transactions that mostly reflected increases in direct investment equity assets and in other investment loans. All major investment categories of assets increased, except financial derivatives.

Direct investment assets increased by $1.52 trillion to $10.80 trillion, and portfolio investment assets increased by $1.25 trillion to $15.32 trillion, driven mainly by foreign stock price increases that raised the market value of these assets. Other investment assets increased by $412.5 billion to $5.44 trillion, driven by increases in loans.

In contrast, financial derivatives decreased by $340.5 billion to $2.20 trillion, driven by decreases in single-currency interest rate contracts.

U.S. liabilities increased by $6.51 trillion to a total of $54.31 trillion at the end of 2023, driven by U.S. stock price increases and by financial transactions that mostly reflected foreign purchases of U.S. long-term debt securities and increases in direct investment equity liabilities. All major investment categories of liabilities increased, except financial derivatives.

Portfolio investment liabilities increased by $3.90 trillion to $28.67 trillion, and direct investment liabilities increased by $2.61 trillion to $14.87 trillion, driven mainly by U.S. stock price increases that raised the market value of these liabilities. Other investment liabilities increased by $264.9 billion to $8.57 trillion, driven by increases in currency and deposits.

In contrast, financial derivatives decreased by $265.6 billion to $2.21 trillion, driven by decreases in single-currency interest rate contracts.

With the release of the International Investment Position (IIP) Accounts on June 26, 2024, the U.S. Bureau of Economic Analysis (BEA) will (1) expand “Table 1.3. Change in the Yearend U.S. Net International Investment Position,” which currently presents annual statistics, to include new quarterly statistics on price changes and exchange-rate changes for U.S. assets and liabilities beginning with the first quarter of 2023 and (2) rename this table as “Table 1.3. Change in the U.S. Net International Investment Position.” The expanded table will be incorporated into BEA's Interactive Data Application and Data Application Programming Interface as a standard table.

Currently, IIP table 1.3 is only available for annual statistics published in March and updated in June each year. This table presents the U.S. net IIP and positions for U.S. assets and liabilities by functional categories (direct investment, portfolio investment, financial derivatives, other investment, and reserve assets). In addition, IIP table 1.3 disaggregates the change in position for a year by financial transactions and by other changes in position, such as price changes, exchange-rate changes, and changes in volume and valuation n.i.e (not included elsewhere). For more information, see paragraph 22.5 in U.S. International Economic Accounts: Concepts and Methods. BEA will continue to publish annual IIP table 1.3 statistics in March each year and update them in June, while quarterly statistics will be published with each quarterly news release in March, June, September, and December.

The expansion of IIP table 1.3 to include new quarterly statistics for other changes in position reflects BEA's incorporation of newly available source data from the Treasury International Capital System “Aggregate Holdings, Purchases and Sales, and Fair Value Changes of Long-Term Securities by U.S. and Foreign Residents” (TIC SLT) report. BEA has incorporated these data to more accurately measure portfolio investment transactions and other changes in position of equity and investment fund shares and of long-term debt securities. BEA's statistics for these portfolio investment transactions, which were previously derived from positions data reported on the TIC SLT form, now reflect the new TIC SLT transactions data, beginning with the first quarter of 2023. For more information on the new source data, see the “Technical Note” included with the U.S. international transactions news release on September 21, 2023. BEA's statistics for portfolio investment other changes in position, such as price and exchange-rate changes, in IIP table 1.3, which were previously estimated from stock and bond market price indices, now reflect the new TIC SLT valuation changes data. Portfolio investment position statistics at the end of a quarter and at yearend presented in this release are not affected by the new treatment of transactions and other changes in position.

To prepare users for this change, a prototype of the expanded IIP table 1.3 is available in BEA's Interactive Data Application and Data Application Programming Interface. For more information, see the Survey of Current Business article “Preview of the 2024 Annual Update of the International Economic Accounts.”