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EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, TUESDAY, JUNE 30, 2020

BEA 20-31

U.S. International Investment Position, First Quarter 2020, Year 2019, and Annual Update

First Quarter 2020

The U.S. net international investment position, the difference between U.S. residents’ foreign financial assets and liabilities, was –$12.06 trillion at the end of the first quarter of 2020, according to statistics released by the U.S. Bureau of Economic Analysis (BEA). Assets totaled $26.77 trillion and liabilities were $38.82 trillion.

At the end of the fourth quarter of 2019, the net investment position was –$11.05 trillion (Table 1).

U.S. Assets and Liabilities: Quarterly, not seasonally adjusted

The –$1.01 trillion change in the net investment position from the fourth quarter of 2019 to the first quarter of 2020 came from net financial transactions of –$184.2 billion and net other changes in position, such as price and exchange rate changes, of –$822.8 billion (Table A).

Coronavirus (COVID-19) Impact on First Quarter 2020 International Investment Position

In the first quarter of 2020, the declines in U.S. assets and liabilities reflect the impact of the COVID-19 pandemic. The disruption to global production and financial markets led to sharp declines in global stock prices, the appreciation of the U.S. dollar against most foreign currencies, and a shortage of U.S. dollar liquidity in foreign money markets. The stock price declines and the appreciation of the U.S. dollar are reflected in price changes and exchange rate changes. Currency swap transactions between the U.S. Federal Reserve System and several foreign central banks to alleviate the shortage of U.S. dollar liquidity contributed to record levels of U.S. acquisition of assets and U.S. incurrence of liabilities. The full economic effects of the COVID-19 pandemic cannot be quantified in the statistics for the first quarter because the impacts are generally embedded in source data and cannot be separately identified. For more information on the currency swaps, see the technical note that accompanied the June 19 international transactions accounts news release.

Table A. Quarterly Change in the U.S. Net International Investment Position
Billions of dollars, not seasonally adjusted

	Position, 2019 Q4	Change in position in 2020 Q1			Position, 2020 Q1
		Total	Attributable to:
		Total	Financial transactions	Other changes in position ¹
U.S. net international investment position	-11,050.5	-1,007.0	-184.2	-822.8	-12,057.5
Net position excluding financial derivatives	-11,070.7	-1,022.1	-162.4	-859.8	-12,092.8
Financial derivatives other than reserves, net	20.2	15.2	-21.8	37.0	35.3
U.S. assets	29,152.8	-2,385.7	(²)	(²)	26,767.1
Assets excluding financial derivatives	27,362.4	-3,595.8	739.9	-4,335.7	23,766.6
Financial derivatives other than reserves	1,790.4	1,210.1	(²)	(²)	3,000.5
U.S. liabilities	40,203.3	-1,378.7	(²)	(²)	38,824.6
Liabilities excluding financial derivatives	38,433.0	-2,573.6	902.3	-3,475.9	35,859.4
Financial derivatives other than reserves	1,770.3	1,194.9	(²)	(²)	2,965.2
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 (see table B and table 2 in this release). 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.

U.S. assets decreased by $2.39 trillion, to a total of $26.77 trillion, at the end of the first quarter, mostly reflecting decreases in portfolio investment and direct investment assets that were partly offset by increases in financial derivatives and in other investment assets. Portfolio investment assets decreased by $2.39 trillion, to $10.99 trillion, and direct investment assets decreased by $1.82 trillion, to $6.98 trillion, reflecting sharp decreases in foreign stock prices and the depreciation of major foreign currencies against the U.S. dollar that lowered the value of these assets in dollar terms. These large changes in asset prices reflected a sudden decrease in production and earnings as global economic activity was disrupted by the COVID-19 pandemic.

U.S. liabilities decreased by $1.38 trillion, to a total of $38.82 trillion, at the end of the first quarter, mostly reflecting decreases in direct investment and portfolio investment liabilities that were partly offset by increases in financial derivatives and in other investment liabilities. Direct investment liabilities decreased by $1.78 trillion, to $8.77 trillion, and portfolio investment liabilities decreased by $1.61 trillion, to $19.78 trillion, mostly reflecting decreases in U.S. stock prices amid the COVID-19 pandemic.

U.S. Assets: Quarterly, not seasonally adjusted

U.S. Liabilities: Quarterly, not seasonally adjusted

Annual Update

The statistics in this release reflect the annual update of the U.S. international investment position (IIP). With this update, BEA has incorporated newly available and revised source data, and has reclassified certain U.S. government capital subscriptions or other contributions to international organizations from loan assets to other equity assets, a new category within other investment assets. The reclassification of other equity assets results in the addition of line items in the IIP and the international transactions accounts (ITAs) for transactions and positions in other equity assets and liabilities. Also, BEA updated other equity and loan assets to incorporate U.S. government transactions and positions that were not previously included. Quarterly statistics are revised for the first quarter of 2006 to the fourth quarter of 2019. Annual statistics are revised for 1976-2019.

For 1976-1999, the reclassification of other equity assets from loan assets results in offsetting revisions between these two investment categories, leaving the statistics for U.S. assets and for the net IIP unchanged.

For 2000-2015, the statistics for U.S. assets and for the net IIP are revised up by an average of $0.8 billion annually, reflecting the incorporation of U.S. government transactions and positions that were not previously included in other equity and loan assets.

For 2016-2019, revisions to the IIP statistics reflect newly available and revised source data that impact all major categories of assets and liabilities (Table 3).

Additional information on these changes is published in “Preview of the 2020 Annual Update of the International Economic Accounts” in the April 2020 issue of the Survey of Current Business. An article describing the revisions to the statistics will be published in the July 2020 issue.

Newly Available and Revised Source Data: Key Providers and Years Affected

Agency	Data	Years affected
BEA	Quarterly direct investment surveys (direct investment assets and liabilities)	2016–2019
U.S. Department of the Treasury	Aggregate Holdings of Long-Term Securities by U.S. and Foreign Residents (portfolio investment assets and liabilities)	2018–2019
	Foreign-Residents’ Holdings of U.S. Securities, including Selected Money Market Instruments (portfolio investment liabilities)	2019
	U.S. Ownership of Foreign Securities, including Selected Money Market Instruments (portfolio investment assets)	2018
	Reports by Financial Institutions of Liabilities to, and Claims on, Foreign Residents by U.S. Residents (portfolio investment and other investment assets and liabilities)	2017-2019
	Reports of Liabilities to, and Claims on, Unaffiliated Foreign Residents by U.S. Resident Non-Financial Institutions (portfolio investment and other investment assets and liabilities)	2017-2019
	Reports of Holdings of, and Transactions in, Financial Derivatives Contracts with Foreign Residents (financial derivatives assets and liabilities)	2018-2019

Annual Update for Year 2019

The U.S. net international investment position was –$11.05 trillion at the end of 2019 compared to –$9.67 trillion at the end of 2018 (Table 2).

The –$1.38 trillion change in the net investment position from the end of 2018 to the end of 2019 came from net financial transactions of –$395.5 billion and net other changes in position, such as price and exchange rate changes, of –$980.5 billion (Table B).

U.S. assets increased by $3.92 trillion, to a total of $29.15 trillion, at the end of 2019, reflecting increases in all major categories of assets, particularly in portfolio investment and direct investment assets. Portfolio investment assets increased by $1.94 trillion, to $13.38 trillion, and direct investment assets increased by $1.35 trillion, to $8.80 trillion, driven mainly by foreign stock price increases.

U.S. liabilities increased by $5.30 trillion, to a total of $40.20 trillion, at the end of 2019, reflecting increases in all major categories of liabilities, particularly in portfolio investment and direct investment liabilities. Portfolio investment liabilities increased by $2.55 trillion, to $21.39 trillion, and direct investment liabilities increased by $2.15 trillion, to $10.55 trillion, driven mainly by U.S. stock price increases.

Table B. Annual Change in the U.S. Net International Investment Position
Billions of dollars

	Position, 2018	Change in position in 2019						Position, 2019
		Total	Attributable to:
			Financial transactions	Other changes in position
			Financial transactions	Total	Price changes	Exchange rate changes	Changes in volume and valuation n.i.e
U.S. net international investment position	-9,674.4	-1,376.1	-395.5	-980.5	(¹)	(¹)	(¹)	-11,050.5
Net position excl. derivatives	-9,716.5	-1,354.2	-357.2	-997.0	-1,104.9	119.5	-11.5	-11,070.7
Financial derivatives, net	42.0	-21.9	-38.3	16.4	(¹)	(¹)	(¹)	20.2
U.S. assets	25,233.8	3,919.0	(²)	(²)	(²)	(²)	(²)	29,152.8
Assets excl. derivatives	23,784.2	3,578.2	440.8	3,137.4	3,080.1	128.3	-71.0	27,362.4
Financial derivatives	1,449.6	340.8	(²)	(²)	(²)	(²)	(²)	1,790.4
U.S. liabilities	34,908.2	5,295.1	(²)	(²)	(²)	(²)	(²)	40,203.3
Liabilities excl. derivatives	33,500.7	4,932.4	798.0	4,134.4	4,185.0	8.8	-59.4	38,433.0
Financial derivatives	1,407.5	362.7	(²)	(²)	(²)	(²)	(²)	1,770.3
1. Data are not separately available for price changes, exchange rate changes, and changes in volume and valuation n.i.e. (not included elsewhere). 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.

Next release: September 29, 2020, at 8:30 A.M. EDT
U.S. International Investment Position, Second Quarter 2020

Full Release and Tables (PDF)

Tables Only (Excel)

Release Highlights (PDF)

Release Highlights - Annual (PDF)

Technical

Christopher Gohrband

(301) 278-9564

Christopher.Gohrband@bea.gov

Technical

Elena Nguyen

(301) 278-9555

Elena.Nguyen@bea.gov

Direct Investment

Doug Weinberg

(301) 278-9590

Douglas.Weinberg@bea.gov

News Media

Jeannine Aversa

(301) 278-9003

Jeannine.Aversa@bea.gov

Resources

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Historical time series for these estimates can be accessed in BEA's interactive data application.
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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.

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.).

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.).

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.

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.

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.

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).

Financial derivatives other than reserves consist of cross-border 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.

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 other equity (equity not in the form of securities), currency and deposits, loans, insurance technical reserves, trade credit and advances, and, for liabilities, special drawing rights allocations.

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.

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.

Statistics on direct investment and multinational enterprises (MNEs) include annual statistics on the activities of U.S. MNEs and U.S. affiliates of foreign MNEs, detailed annual and quarterly statistics on direct investment, and annual statistics on new foreign direct investment in the United States.

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.