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EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, WEDNESDAY, SEPTEMBER 27, 2017 Technical: Media: Christopher Gohrband Elena Nguyen Doug Weinberg (Direct Investment) Jeannine Aversa (301) 278-9564 (301) 278-9555 (301) 278-9590 (301) 278-9003 BEA 17-50 Christopher.Gohrband@bea.gov Elena.Nguyen@bea.gov Douglas.Weinberg@bea.gov Jeannine.Aversa@bea.gov U.S. Net International Investment Position Second Quarter 2017 The U.S. net international investment position increased to −$7,934.9 billion (preliminary) at the end of the second quarter of 2017 from −$8,091.6 billion (revised) at the end of the first quarter, according to statistics released today by the Bureau of Economic Analysis (BEA). The $156.7 billion increase reflected a $1,004.2 billion increase in U.S. assets and an $847.5 billion increase in U.S. liabilities (table 1). U.S. Net International Investment Position Quarterly, not seasonally adjusted Billion $ 0 -1,000 -2,000 -3,000 -4,000 -5,000 -6,000 -7,000 -8,000 -9,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 U.S. Bureau of Economic Analysis The $156.7 billion increase reflected net financial transactions of –$107.5 billion and net other changes in position, such as price and exchange-rate changes, of $264.2 billion (table A). The net investment position increased 1.9 percent in the second quarter, compared with an increase of 2.7 percent in the first quarter, and an average quarterly decrease of 5.6 percent from the first quarter of 2011 through the fourth quarter of 2016. U.S. assets increased $1,004.2 billion to $25,937.6 billion at the end of the second quarter, mostly reflecting increases in portfolio investment and direct investment assets. Assets excluding financial derivatives increased $1,019.6 billion to $24,006.3 billion. The increase resulted from other changes in position of $657.3 billion and financial transactions of $362.2 billion (table A). Other changes in position mostly reflected the appreciation of major foreign currencies against the U.S. dollar that raised the value of assets in dollar terms. Financial transactions mostly reflected net acquisition of portfolio investment and direct investment equity assets. U.S. Assets and Liabilities Quarterly, not seasonally adjusted Billion $ 35,000 U.S. liabilities 30,000 25,000 U.S. assets 20,000 15,000 10,000 5,000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 U.S. Bureau of Economic Analysis Table A. Quarterly Change in the U.S. Net International Investment Position Billions of dollars, not seasonally adjusted Position, 2017:I U.S. net international investment position Net position excluding financial derivatives Financial derivatives other than reserves, net -8,091.6 -8,133.3 41.6 Change in position in 2017:II Attributable to: Total Financial Other changes 1 transactions in position 156.7 -107.5 264.2 161.3 -116.8 278.1 -4.6 9.3 -13.9 2 () 657.3 2 () 2 () 379.2 2 () U.S. assets Assets excluding financial derivatives Financial derivatives other than reserves 24,933.4 22,986.7 1,946.7 1,004.2 1,019.6 -15.4 () 362.2 2 () U.S. liabilities Liabilities excluding financial derivatives Financial derivatives other than reserves 33,025.0 31,120.0 1,905.1 847.5 858.3 -10.8 () 479.1 2 () Position, 2017:II -7,934.9 -7,972.0 37.1 2 25,937.6 24,006.3 1,931.3 2 33,872.5 31,978.2 1,894.3 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. –2– U.S. liabilities increased $847.5 billion to $33,872.5 billion at the end of the second quarter, mostly reflecting increases in portfolio investment and direct investment liabilities. Liabilities excluding financial derivatives increased $858.3 billion to $31,978.2 billion. The increase resulted from financial transactions of $479.1 billion and other changes in position of $379.2 billion (table A). Financial transactions mostly reflected net incurrence of portfolio investment liabilities. Other changes in position mostly reflected price increases on portfolio investment and direct investment liabilities. Updates to First Quarter 2017 International Investment Position Aggregates Billions of dollars, not seasonally adjusted Preliminary estimate -8,141.2 24,833.2 7,843.6 10,570.2 1,946.7 4,039.6 433.1 32,974.5 7,952.4 17,859.8 1,905.1 5,257.2 U.S. net international investment position U.S. assets Direct investment at market value Portfolio investment Financial derivatives other than reserves Other investment Reserve assets U.S. liabilities Direct investment at market value Portfolio investment Financial derivatives other than reserves Other investment Revised estimate -8,091.6 24,933.4 7,895.4 10,591.6 1,946.7 4,066.6 433.1 33,025.0 7,952.4 17,908.3 1,905.1 5,259.2 Next release: December 28, 2017, at 8:30 A.M. EST U.S. Net International Investment Position, Third Quarter 2017 –3– Additional Information Price changes (only presented for annual statistics in the June news release) are changes in the value of an asset or liability due to changes in the market price of a financial instrument. Resources Stay informed about BEA developments by reading the BEA blog, signing up for BEA’s email subscription service, or following BEA on Twitter @BEA_News. Historical time series for these estimates can be accessed in BEA’s Interactive Data Application. Access BEA data by registering for BEA’s Data Application Programming Interface (API). For more on BEA’s statistics, see our monthly online journal, the Survey of Current Business. BEA's news release schedule. More information on these international investment position statistics will be provided next month in the Survey of Current Business. More information on the international investment position accounts and a description of the estimation methods used to compile them is provided in U.S. International Economic Accounts: Concepts and Methods. Exchange-rate changes (only presented for annual statistics in the June news release) are changes in the value of foreign-currency denominated assets and liabilities due to changes in the values of foreign currencies relative to the value of the U.S. dollar. Changes in volume and valuation n.i.e. (only presented for annual statistics in the June news release) reflect changes in position due to year-to-year shifts in the composition of reporting panels, the incorporation of more comprehensive annual and benchmark survey results, and revaluations (holding gains and losses) on assets and liabilities that are not explained by price changes or exchange-rate changes. Functional categories are the primary classification system used in the IIP and in the financial account of the ITAs. The five functional categories are direct investment, portfolio investment, financial derivatives other than reserves, other investment, and reserve assets. While the functional categories are based on features that are relevant for understanding cross-border financial transactions and positions, they also take into account some aspects of the relationship between transactors and the economic motivation for the investment. Within the functional categories, the IIP accounts are classified by type of financial instrument. Definitions The international investment position (IIP) is a statistical balance sheet that presents the dollar value of U.S. financial assets and liabilities with respect to foreign residents at a specific point in time. BEA presents IIP statistics at the end of a quarter or year (March, June, September, and December). For the June release, BEA also presents statistics on changes in the yearend position that are disaggregated into financial transactions, price changes, exchange-rate changes, and changes in volume and valuation not included elsewhere (n.i.e.). Direct investment is a category of cross-border investment associated with a resident in one economy having control or a significant degree of influence on the management of an enterprise resident in another economy. Ownership or control of 10 percent or more of the voting securities of an entity in another economy is the threshold for separating direct investment from other types of investment. Direct investment positions include positions in equity and debt instruments. BEA’s IIP statistics feature the market value measure of direct investment positions, a measure that values owner’s equity at current-period prices using indexes of stock market prices. The U.S. net international investment position is defined as the value of U.S. assets less the value of U.S. liabilities. Financial transactions are transactions between U.S. residents and nonresidents in financial assets and liabilities. They are also recorded in the financial account of the international transactions accounts (ITAs). See Related Statistics below. Other changes in position are changes in the value of U.S. assets or liabilities arising from any source besides a financial transaction. Other changes in position include price changes, exchange-rate changes, and changes in volume and valuation not included elsewhere (n.i.e.). Portfolio investment consists of cross-border positions involving equity and investment fund shares and debt securities, excluding those included in direct investment or reserve assets. Debt securities are classified by original maturity (short term vs. long term at the time of issue). –4– Financial derivatives other than reserves consist of crossborder positions arising from financial contracts that are linked to underlying financial instruments, commodities, or indicators. Positions in financial derivatives consist of contracts with positive and negative fair values. A contract with a positive fair value is a U.S. asset and represents the amount that a foreign resident would have to pay to a U.S. counterparty if the contract were terminated or settled. A contract with a negative fair value is a U.S. liability and represents the amount that a U.S. resident would have to pay to a foreign counterparty if the contract were terminated or settled. The gross positive (negative) fair value is the sum across all contracts with positive (negative) fair values. Fair values differ from notional values, which are the underlying amounts used to calculate payments on contracts. Gross positive and gross negative fair values for financial derivatives positions are available separately in table 1. However, transactions and other changes in financial derivatives positions are only available for the net position in financial derivatives. For other changes in position for financial derivatives presented in the June news release, statistics are not separately available for price changes, exchange-rate changes, and changes in volume and valuation n.i.e. Release and update schedule Preliminary quarterly IIP account statistics are released in March, June, September, and December, approximately 90 days after the end of the reference quarter. These statistics are updated the following quarter to incorporate new and revised source data. Quarterly statistics are open for revision for at least the prior three years in annual updates released in June. Preliminary annual statistics are released in March reflecting positions at the end of the fourth quarter of the previous year. These annual statistics are open for revision for at least the prior three years in subsequent annual updates. Related statistics The IIP statistics comprise one part of a broader set of U.S. international economic accounts that, taken together, provide a comprehensive, integrated and detailed picture of U.S. international economic activities. The international transactions accounts (ITAs) are released quarterly. Financial transactions reported in the financial account of the ITAs are one type of change in position recorded in the IIP. Financial transactions are transactions between U.S. residents and nonresidents for direct investment, portfolio investment, other investment, reserve assets, and financial derivatives. Other investment includes cross-border positions other than those included in direct investment, portfolio investment, financial derivatives, and reserve assets. Other investment positions consist of positions in currency and deposits, loans, insurance technical reserves, trade credit and advances, and, for liabilities, special drawing rights allocations. Statistics on direct investment and multinational enterprises (MNEs) include annual statistics on the activities of MNEs, detailed annual and quarterly statistics on direct investment, and annual statistics on new investment in the United States. Reserve assets are those external assets that are readily available to and controlled by U.S. monetary authorities for meeting balance of payments financing needs, for intervention in exchange markets to affect the currency exchange rate, and for other related purposes such as maintaining confidence in the currency and the economy and serving as a basis for foreign borrowing. The major published components are monetary gold, International Monetary Fund (IMF) special drawing rights (SDRs), reserve position in the IMF, and other reserve assets. Statistics on international services include detailed annual information on trade in services and on services supplied through the channel of direct investment by affiliates of multinational enterprises. U.S. international trade in goods and services, released by BEA and the U.S. Census Bureau, provides monthly statistics on trade in goods and services. List of News Release Tables Table 1. U.S. Net International Investment Position at the End of the Period –5– September 27, 2017 Table 1. U.S. Net International Investment Position at the End of the Period [Billions of dollars, not seasonally adjusted] Line 2016 Type of investment I 1 U.S. net international investment position (line 4 less line 35)............................................. -7,833.4 2 Net international investment position excluding financial derivatives (line 5 less line 36)...... -7,871.1 3 Financial derivatives other than reserves, net (line 6 less line 37)......................................... 37.7 4 U.S. assets............................................................................................................................. 24,090.4 5 Assets excluding financial derivatives (sum of lines 7, 10, 21, and 26)............................... 21,050.6 6 Financial derivatives other than reserves, gross positive fair value (line 15)....................... 3,039.8 By functional category: 7 Direct investment at market value........................................................................................ 7,036.1 8 Equity................................................................................................................................ 5,818.9 9 Debt instruments................................................................................................................ 1,217.2 10 Portfolio investment............................................................................................................ 9,560.3 11 Equity and investment fund shares.................................................................................... 6,665.3 12 Debt securities................................................................................................................... 2,895.0 13 Short term........................................................................................................................ 535.7 14 Long term........................................................................................................................ 2,359.2 15 Financial derivatives other than reserves, gross positive fair value.................................... 3,039.8 16 Over-the-counter contracts................................................................................................ 2,990.9 17 Single-currency interest rate contracts............................................................................ 2,427.6 18 Foreign exchange contracts............................................................................................ 379.1 19 Other contracts................................................................................................................ 184.2 20 Exchange-traded contracts................................................................................................ 48.9 21 Other investment................................................................................................................. 4,022.2 22 Currency and deposits....................................................................................................... 1,709.1 23 Loans................................................................................................................................. 2,265.0 24 Insurance technical reserves............................................................................................. n.a. 25 Trade credit and advances................................................................................................ 48.1 26 Reserve assets................................................................................................................... 432.0 27 Monetary gold................................................................................................................... 323.5 28 Special drawing rights........................................................................................................ 50.5 29 Reserve position in the International Monetary Fund........................................................ 16.7 30 Other reserve assets......................................................................................................... 41.3 31 Currency and deposits..................................................................................................... 19.3 32 Securities......................................................................................................................... 22.1 33 Financial derivatives........................................................................................................ ..... 34 Other claims.................................................................................................................... 0.0 35 U.S. liabilities.......................................................................................................................... 31,923.9 36 Liabilities excluding financial derivatives (sum of lines 38, 41, and 56)............................... 28,921.8 37 Financial derivatives other than reserves, gross negative fair value (line 50)...................... 3,002.1 By functional category: 38 Direct investment at market value........................................................................................ 6,861.9 39 Equity................................................................................................................................ 5,182.5 40 Debt instruments................................................................................................................ 1,679.4 41 Portfolio investment............................................................................................................ 16,880.1 42 Equity and investment fund shares.................................................................................... 6,138.1 43 Debt securities................................................................................................................... 10,742.0 44 Short term........................................................................................................................ 948.8 45 Treasury bills and certificates........................................................................................ 726.6 46 Other short-term securities............................................................................................ 222.2 47 Long term........................................................................................................................ 9,793.1 48 Treasury bonds and notes............................................................................................. 5,559.9 49 Other long-term securities............................................................................................. 4,233.2 50 Financial derivatives other than reserves, gross negative fair value................................... 3,002.1 51 Over-the-counter contracts................................................................................................ 2,950.9 52 Single-currency interest rate contracts............................................................................ 2,366.3 53 Foreign exchange contracts............................................................................................ 398.1 54 Other contracts................................................................................................................ 186.6 55 Exchange-traded contracts................................................................................................ 51.2 56 Other investment................................................................................................................. 5,179.8 57 Currency and deposits....................................................................................................... 2,912.4 58 Loans................................................................................................................................. 2,045.2 59 Insurance technical reserves............................................................................................. n.a. 60 Trade credit and advances................................................................................................ 172.4 61 Special drawing rights allocations...................................................................................... 49.8 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 –6– II 2017 III IV -8,292.1 -8,035.9 -8,318.4 -8,347.9 -8,089.5 -8,379.7 55.8 53.6 61.3 24,558.4 24,839.3 23,849.4 21,262.3 22,066.3 21,640.5 3,296.1 2,773.0 2,209.0 r p I II -8,091.6 -7,934.9 -8,133.3 -7,972.0 41.6 37.1 24,933.4 25,937.6 22,986.7 24,006.3 1,946.7 1,931.3 Change: 2017:I to 2017:II Line 156.7 161.3 -4.6 1,004.2 1,019.6 -15.4 1 2 3 4 5 6 7,002.4 7,392.2 7,375.0 7,895.4 8,202.0 5,779.9 6,146.7 6,172.3 6,608.5 6,918.1 1,222.5 1,245.5 1,202.7 1,286.9 1,283.9 9,655.4 10,084.7 9,879.2 10,591.6 11,210.6 6,723.6 7,144.8 6,997.0 7,568.6 8,075.2 2,931.9 2,939.8 2,882.2 3,023.0 3,135.4 512.9 467.0 462.3 506.0 541.5 2,418.9 2,472.8 2,419.9 2,517.0 2,594.0 3,296.1 2,773.0 2,209.0 1,946.7 1,931.3 3,230.6 2,723.8 2,166.9 1,911.3 1,893.8 2,635.1 2,273.6 1,622.2 1,478.4 1,428.3 422.4 282.8 386.7 272.4 297.3 173.1 167.3 158.0 160.4 168.2 65.6 49.2 42.1 35.4 37.6 4,150.1 4,132.3 3,978.9 4,066.6 4,157.9 1,731.9 1,643.7 1,559.8 1,602.0 1,626.0 2,372.5 2,440.9 2,373.7 2,415.2 2,481.7 n.a. n.a. n.a. n.a. n.a. 45.7 47.7 45.4 49.3 50.2 454.4 457.1 407.2 433.1 435.7 345.4 345.8 301.1 325.5 324.8 50.2 50.1 48.9 49.3 50.6 16.7 18.3 18.4 18.3 18.8 42.1 42.9 38.9 39.9 41.4 20.9 23.5 17.7 20.2 22.6 21.2 19.3 21.1 19.7 18.7 ..... ..... ..... ..... ..... 0.0 0.0 0.0 0.0 0.0 32,850.6 32,875.2 32,167.8 33,025.0 33,872.5 29,610.2 30,155.8 30,020.1 31,120.0 31,978.2 3,240.3 2,719.4 2,147.7 1,905.1 1,894.3 306.6 309.6 -3.0 619.0 506.6 112.4 35.4 77.0 -15.4 -17.5 -50.1 24.9 7.8 2.1 91.4 24.0 66.5 n.a. 0.9 2.6 -0.7 1.3 0.6 1.4 2.4 -1.0 ..... 0.0 847.5 858.3 -10.8 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 7,122.7 7,423.9 7,569.3 7,952.4 8,162.1 5,377.2 5,607.2 5,783.5 6,152.6 6,353.0 1,745.5 1,816.7 1,785.8 1,799.8 1,809.1 17,151.3 17,511.6 17,352.3 17,908.3 18,451.0 6,184.4 6,488.6 6,564.0 7,001.9 7,195.3 10,966.9 11,023.0 10,788.4 10,906.4 11,255.7 925.7 953.7 945.9 942.0 979.8 688.2 698.8 672.4 673.0 698.8 237.5 254.9 273.5 269.0 281.1 10,041.2 10,069.3 9,842.5 9,964.4 10,275.8 5,593.0 5,459.3 5,333.9 5,406.0 5,472.8 4,448.3 4,610.0 4,508.6 4,558.4 4,803.0 3,240.3 2,719.4 2,147.7 1,905.1 1,894.3 3,178.6 2,669.3 2,104.6 1,867.9 1,852.8 2,567.4 2,204.2 1,568.1 1,418.5 1,372.0 429.6 289.6 366.8 280.4 305.3 181.6 175.6 169.6 169.0 175.5 61.7 50.0 43.1 37.2 41.5 5,336.2 5,220.3 5,098.6 5,259.2 5,365.1 3,003.1 2,941.0 2,949.8 3,020.3 3,132.2 2,107.6 2,056.9 1,925.8 2,006.7 1,999.0 n.a. n.a. n.a. n.a. n.a. 176.0 173.2 175.5 184.2 184.8 49.4 49.3 47.5 47.9 49.1 209.7 200.4 9.3 542.7 193.4 349.3 37.8 25.7 12.1 311.4 66.8 244.7 -10.8 -15.1 -46.5 24.9 6.5 4.3 105.9 111.9 -7.8 n.a. 0.6 1.2 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61