News Release

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. Net International Investment Position
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:
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
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