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NEWS RELEASE EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, TUESDAY, March 31, 2015 Christopher A. Gohrband: (202) 606-9564 BEA 15-15 Elena L. Nguyen: (202) 606-9555 Doug Weinberg: (202) 606-9590 (For inquiries regarding direct investment) U.S. Net International Investment Position: End of the Fourth Quarter and Year 2014 Fourth Quarter The U.S. net international investment position at the end of the fourth quarter of 2014 was -$6,915.3 billion (preliminary) as the value of U.S. liabilities exceeded the value of U.S. assets (chart 1, table 1). At the end of the third quarter of 2014, the net position was -$6,129.4 billion (revised). The $785.8 billion decrease in the net position reflected an $861.9 billion increase in the value of U.S. liabilities that exceeded a $76.1 billion increase in the value of U.S. assets. Notice About the 2015 Annual Revision of the U.S. Net International Investment Position The annual revision of the U.S. net international investment position will be released along with preliminary estimates for the first quarter of 2015 on June 30, 2015. An article previewing the annual revisions will appear in the April 2015 issue of the Survey of Current Business. __________________ NOTE: This news release is available on BEA’s Web site <www.bea.gov> along with Quarterly Highlights and Annual Highlights related to this release, the latest detailed statistics for the U.S. net international investment position, and a description of the estimation methods used to compile them. The fourth-quarter and year 2014 statistics in this release are preliminary and will be revised on June 30, 2015. -more- -2The U.S. net international investment position decreased 12.8 percent in the fourth quarter, compared with a decrease of 11.9 percent in the third quarter and an average quarterly decrease of 6.5 percent from the first quarter of 2011 through the second quarter of 2014. The net position was equal to 3.4 percent of the value of all U.S. financial assets at the end of the fourth quarter, up from 3.1 percent at the end of the third quarter.1 The decrease in the net position reflected 1) the depreciation of major foreign currencies against the U.S. dollar that lowered the value of most U.S. assets and 2) the increase in U.S. equity prices that increased at a higher rate than foreign equity prices. U.S. assets were $24,693.2 billion at the end of the fourth quarter compared with $24,617.2 billion at the end of the third quarter (chart 2). The $76.1 billion increase reflected a $464.4 billion increase in the value of financial derivatives that was partly offset by a $388.4 billion decrease in the value of assets excluding financial derivatives. U.S. assets excluding financial derivatives were $21,430.5 billion at the end of the fourth quarter compared with $21,818.9 billion at the end of the third quarter. The $388.4 billion decrease reflected a $448.2 billion decrease resulting from other changes in position that was partly offset by a $59.8 billion increase resulting from financial transactions.2 Other changes in position were mostly attributable to the depreciation of major foreign currencies against the U.S. dollar that lowered the value of U.S. assets in dollar terms.3 U.S. liabilities were $31,608.5 billion at the end of the fourth quarter compared with $30,746.6 billion at the end of the third quarter (chart 2). The $861.9 billion increase reflected a $444.8 billion increase in the value of financial derivatives and a $417.1 billion increase in the value of liabilities excluding financial derivatives. U.S. liabilities excluding financial derivatives were $28,419.6 billion at the end of the fourth quarter compared with $28,002.5 billion at the end of the third quarter. The $417.1 billion increase reflected a $54.1 billion increase resulting from financial transactions and a $363.0 billion increase resulting from other changes in position. Other changes in position were mostly attributable to increases in U.S. equity prices that raised the value of U.S. direct investment and portfolio investment liabilities. These increases were partly offset by decreases in the value of U.S. liabilities denominated in foreign currencies as the U.S. dollar strengthened in the fourth quarter. Board of Governors of the Federal Reserve System (FRS), “Table L.5 Total Liabilities and Its Relation to Total Financial Assets,” in Financial Accounts of the United States, Fourth Quarter 2014, Z.1. Statistical Release (Washington, DC: FRS, March 12, 2015):11. According to the March release, at the end of the fourth quarter, the value of all U.S. financial assets was $201,605.6 billion. The value of U.S. assets abroad was $24,693.2 billion, or 12.2 percent of all U.S. assets, down from 12.4 percent at the end of the third quarter and down from the 14.1 percent series peak at the end of the first quarter of 2008. 1 2 For statistics on financial transactions, see the financial account in table 1.2 of the U.S. International Transactions Accounts. Quarterly financial transactions presented in this release are not seasonally adjusted. Detail on other changes in position such as price changes, exchange-rate changes, and other changes in volume and valuation is presented only for annual statistics in the June release each year. According to the Federal Reserve Board’s major currencies index, foreign currencies depreciated 5 percent against the U.S. dollar from the end of the third quarter to the end of the fourth quarter. The major currencies index is a weighted average of the foreign exchange values of the U.S. dollar against a subset of the broad index currencies that circulate widely outside the country of issue. See Foreign Exchange Rates—H10 (weekly release of daily data), Nominal Major Currencies Index at www.federalreserve.gov. 3 -more- -3- Revisions The U.S. net international investment position at the end of the third quarter of 2014 was revised to -$6,129.4 billion from the previously-published value of -$6,157.9 billion. The $28.5 billion upward revision to the net position reflected a $2.5 billion upward revision to U.S. assets and a $25.9 billion downward revision to U.S. liabilities. U.S. assets at the end of the third quarter were revised to $24,617.2 billion from $24,614.6 billion; U.S. liabilities were revised to $30,746.6 billion from $30,772.5 billion. These revisions reflect revised source data from the Treasury International Capital (TIC) reporting system and from BEA’s quarterly surveys of direct investment. Year 2014 The U.S. net international investment position was -$6,915.3 billion (preliminary) at the end of 2014 compared with -$5,383.0 billion at the end of 2013. The $1,532.3 billion decrease in the net position reflected a $2,515.6 billion increase in the value of U.S. liabilities that exceeded a $983.4 billion increase in the value of U.S. assets. The U.S. net international investment position decreased 28.5 percent from the end of 2013 to the end of 2014, compared with a 17.6 percent decrease from the end of 2012 to the end of 2013. The decrease in the net position reflected 1) the depreciation of major foreign currencies against the U.S. dollar that lowered the value of most U.S. assets and 2) the increase in U.S. equity prices that increased at a higher rate than foreign equity prices. U.S. assets were $24,693.2 billion at the end of 2014 compared with $23,709.8 billion at the end of 2013. The $983.4 billion increase reflected a $540.5 billion increase in the value of assets excluding financial derivatives and a $442.8 billion increase in the value of financial derivatives. U.S. assets excluding financial derivatives were $21,430.5 billion at the end of 2014 compared with $20,890.0 billion at the end of 2013. The $540.5 billion increase reflected an $820.5 billion increase resulting from financial transactions that was partly offset by a $280.0 billion decrease resulting from other changes in position. Other changes in position were mostly attributable to the depreciation of major foreign currencies against the U.S. dollar that was partly offset by increases in foreign stock and bond prices. U.S. liabilities were $31,608.5 billion at the end of 2014 compared with $29,092.8 billion at the end of 2013. The $2,515.6 billion increase reflected a $2,073.1 billion increase in the value of liabilities excluding financial derivatives and a $442.5 billion increase in the value of financial derivatives. U.S. liabilities excluding financial derivatives were $28,419.6 billion at the end of 2014 compared with $26,346.6 billion at the end of 2013. The $2,073.1 billion increase reflected a $1,164.5 billion increase resulting from other changes in position and a $908.6 billion increase resulting from financial transactions. Other changes in position were mostly attributable to increases in U.S. equity prices that raised the value of direct investment and portfolio investment liabilities, and to a lesser extent, increases in U.S. Treasury bond prices. Partly offsetting these increases were decreases in the value of U.S. liabilities denominated in foreign currencies as the U.S. dollar strengthened in 2014. -4- * * * Release dates in 2015: End of the Fourth Quarter and Year 2014..........................................March 31, 2015 (Tuesday) End of the First Quarter of 2015, Year 2014, and Annual Revisions…June 30, 2015 (Tuesday) End of the Second Quarter of 2015..............................................September 29, 2015 (Tuesday) End of the Third Quarter of 2015..................................................December 29, 2015 (Tuesday) * * * BEA statistics—including GDP, personal income, the balance of payments, foreign direct investment, the input-output accounts, and economic statistics for states, local areas, and industries—are available on the BEA Web site: www.bea.gov. E-mail alerts are also available. -5Table 1. U.S. Net International Investment Position at the End of the Period [Millions of dollars, not seasonally adjusted] Line Type of investment 2013 Change: 2014:III to 2014:IV 2014 IV I II III r IV p Change: 2013:IV to 2014:IV 1 U.S. net international investment position (line 4 less line 35)....................................... -5,382,996 -5,511,678 -5,475,364 -6,129,420 -6,915,258 -785,838 -1,532,262 2 Net international investment position excluding financial derivatives (line 5 less line 36).... -5,456,542 -5,581,501 -5,509,876 -6,183,634 -6,989,104 -805,470 -1,532,562 3 Financial derivatives other than reserves, net (line 6 less line 37)....................................... 73,546 69,823 34,512 54,214 73,846 19,632 300 4 U.S. assets............................................................................................................................ 23,709,843 24,020,053 24,976,981 24,617,162 24,693,220 76,058 983,377 5 Assets excluding financial derivatives (sum of lines 7, 10, 21, and 26)............................. 20,890,008 21,365,676 22,290,695 21,818,906 21,430,538 -388,368 540,530 6 Financial derivatives other than reserves, gross positive fair value (line 15)..................... 2,819,835 2,654,377 2,686,286 2,798,256 3,262,682 464,426 442,847 81,658 By functional category: 7 Direct investment at market value...................................................................................... 7,080,058 7,117,452 7,488,612 7,249,048 7,161,716 -87,332 8 Equity................................................................................................................................ 6,070,002 6,135,437 6,428,797 6,168,989 6,074,738 -94,251 4,736 9 Debt instruments.............................................................................................................. 1,010,056 982,015 1,059,815 1,080,059 1,086,978 6,919 76,922 10 Portfolio investment............................................................................................................ 9,183,060 9,387,778 9,981,018 9,696,511 9,562,370 -134,141 379,310 11 Equity and investment fund shares.................................................................................. 6,444,232 6,593,895 7,027,230 6,769,104 6,685,216 -83,888 240,984 12 Debt securities.................................................................................................................. 2,738,828 2,793,883 2,953,788 2,927,407 2,877,154 -50,253 138,326 13 Short term....................................................................................................................... 446,710 437,064 483,366 474,847 457,709 -17,138 10,999 14 Long term........................................................................................................................ 2,292,118 2,356,820 2,470,422 2,452,560 2,419,445 -33,115 127,327 15 Financial derivatives other than reserves, gross positive fair value................................... 2,819,835 2,654,377 2,686,286 2,798,256 3,262,682 464,426 442,847 16 Over-the-counter contracts.............................................................................................. 2,783,047 2,618,573 2,651,879 2,754,529 3,194,742 440,213 411,695 17 Single-currency interest rate contracts.......................................................................... 2,207,692 2,074,456 2,170,053 2,103,877 2,488,245 384,368 280,553 18 Foreign exchange contracts........................................................................................... 291,934 271,566 229,408 412,123 429,058 16,935 137,124 19 Other contracts............................................................................................................... 283,421 272,551 252,418 238,529 277,439 38,910 -5,982 20 Exchange-traded contracts.............................................................................................. 36,788 35,804 34,407 43,727 67,940 24,213 31,152 21 Other investment................................................................................................................ 4,178,557 4,389,562 4,343,200 4,429,360 4,272,202 -157,158 93,645 22 Currency and deposits..................................................................................................... 1,972,149 1,949,267 1,921,206 1,933,190 1,797,686 -135,504 -174,463 23 Loans................................................................................................................................ 2,161,123 2,401,733 2,382,089 2,454,906 2,428,608 -26,298 267,485 24 Insurance technical reserves........................................................................................... n.a. n.a. n.a. n.a. n.a. n.a. n.a. 25 Trade credit and advances............................................................................................... 45,286 38,562 39,905 41,264 45,909 4,645 623 26 Reserve assets.................................................................................................................. 448,333 470,884 477,865 443,987 434,250 -9,737 -14,083 27 Monetary gold.................................................................................................................... 314,975 337,791 343,871 318,113 315,368 -2,745 393 28 Special drawing rights...................................................................................................... 55,184 55,394 55,411 53,148 51,940 -1,208 -3,244 29 Reserve position in the International Monetary Fund........................................................ 30,750 29,820 30,535 28,358 25,164 -3,194 -5,586 30 Other reserve assets........................................................................................................ 47,424 47,879 48,048 44,368 41,778 -2,590 -5,646 31 Currency and deposits................................................................................................... 20,889 20,930 24,777 22,143 19,003 -3,140 -1,886 32 Securities........................................................................................................................ 21,436 21,727 21,866 22,225 22,775 550 1,339 33 Financial derivatives....................................................................................................... ..... ..... ..... ..... ..... ..... ..... 34 Other claims................................................................................................................... 5,099 5,222 1,405 0 0 0 -5,099 35 U.S. liabilities........................................................................................................................ 29,092,840 29,531,731 30,452,345 30,746,583 31,608,478 861,895 2,515,638 36 Liabilities excluding financial derivatives (sum of lines 38, 41, and 56)............................. 26,346,551 26,947,177 27,800,571 28,002,541 28,419,642 417,101 2,073,091 37 Financial derivatives other than reserves, gross negative fair value (line 50).................... 2,746,289 2,584,554 2,651,774 2,744,042 3,188,836 444,794 442,547 By functional category: 38 Direct investment at market value...................................................................................... 5,790,551 5,688,887 5,999,708 6,033,615 6,252,960 219,345 462,409 39 Equity................................................................................................................................ 4,461,978 4,387,205 4,623,555 4,664,521 4,871,458 206,937 409,480 40 Debt instruments.............................................................................................................. 1,328,573 1,301,682 1,376,153 1,369,094 1,381,502 12,408 52,929 41 Portfolio investment............................................................................................................ 15,503,192 15,904,348 16,310,118 16,480,961 16,833,145 352,184 1,329,953 42 Equity and investment fund shares.................................................................................. 5,821,487 5,993,925 6,253,926 6,351,347 6,570,221 218,874 748,734 43 Debt securities.................................................................................................................. 9,681,705 9,910,423 10,056,192 10,129,614 10,262,924 133,310 581,219 44 Short term....................................................................................................................... 892,655 904,771 877,460 871,012 912,874 41,862 20,219 45 Treasury bills and certificates....................................................................................... 686,036 689,327 626,830 614,053 671,636 57,583 -14,400 46 Other short-term securities.......................................................................................... 206,619 215,444 250,630 256,959 241,238 -15,721 34,619 47 Long term........................................................................................................................ 8,789,050 9,005,652 9,178,732 9,258,602 9,350,050 91,448 561,000 48 Treasury bonds and notes............................................................................................ 5,108,856 5,262,471 5,385,706 5,454,340 5,484,544 30,204 375,688 49 Other long-term securities............................................................................................ 3,680,194 3,743,181 3,793,026 3,804,262 3,865,506 61,244 185,312 50 Financial derivatives other than reserves, gross negative fair value.................................. 2,746,289 2,584,554 2,651,774 2,744,042 3,188,836 444,794 442,547 51 Over-the-counter contracts.............................................................................................. 2,709,746 2,551,372 2,618,113 2,700,422 3,124,489 424,067 414,743 52 Single-currency interest rate contracts.......................................................................... 2,142,859 2,013,740 2,110,959 2,049,195 2,436,093 386,898 293,234 53 Foreign exchange contracts........................................................................................... 290,790 270,895 256,358 414,990 418,194 3,204 127,404 54 Other contracts............................................................................................................... 276,097 266,737 250,796 236,237 270,202 33,965 -5,895 55 Exchange-traded contracts.............................................................................................. 36,543 33,182 33,661 43,620 64,347 20,727 27,804 56 Other investment................................................................................................................ 5,052,808 5,353,942 5,490,745 5,487,965 5,333,537 -154,428 280,729 57 Currency and deposits..................................................................................................... 2,758,129 2,681,963 2,787,408 2,821,471 2,711,417 -110,054 -46,712 58 Loans................................................................................................................................ 2,095,860 2,457,106 2,485,327 2,453,149 2,409,687 -43,462 313,827 59 Insurance technical reserves........................................................................................... n.a. n.a. n.a. n.a. n.a. n.a. n.a. 60 Trade credit and advances............................................................................................... 144,433 160,288 163,416 160,987 161,267 280 16,834 61 Special drawing rights allocations.................................................................................... 54,386 54,585 54,594 52,358 51,166 -1,192 -3,220 p Preliminary r Revised n.a. Not available ..... Not applicable Note: Details may not add to totals because of rounding. Source: U. S. Bureau of Economic Analysis