༒What Is a Net International Investment Position (NIIP)?

A net international investment position (NIIP) measures the gap between a nation’s stock of foreign assets and a foreigner's stock of that nation's assets. Essentially, it can be viewed as a nation’s 澳洲幸运5官方开奖结果体彩网:balance sheet wꩵith the rest of the ꦯworld at a specific point in time.

U🅘nderstanding a Ne🌃t International Investment Position (NIIP)

NIIP includes overseas assets and 澳洲幸运5官方开奖结果体彩网:liabilities held by a nation’s government, the private sector, and its citizens. The NIIP is analogous to 澳洲幸运5官方开奖结果体彩网:net foreign assets (NFA), which determines whether a country is🐽 a creditor or debtor nation by measuring the difference in its external as🎃sets and liabilities.

Most nations release NIIP figures quarterly. In the NIIP, assets are divided into 澳洲幸运5官方开奖结果体彩网:direct investment, 澳洲幸运5官方开奖结果体彩网:portfolio investment, other investment, and 澳洲幸运5官方开奖结果体彩网:reserve assets, which include foreign cu⭕rrencies, gold, and special drawing rights. Liabilities are reported with the same classification, except for “reserve assets,” which have no equivalent on the liabilities side.

Why a Net Internati﷽onal Investment Positio🔜n (NIIP) Is Important

A nation’s NIIP is a key component of the national balance sheet since NIIP plus the value of 澳洲幸运5官方开奖结果体彩网:non-financial assets is equal to an economy's 澳洲幸运5官方开奖结果体彩网:net worth. The NIIP, coupled with the balance🔜 of payments transactions, reflects the domestic ec🧸onomy’s set of international accounts.

The NIIP position is an important barometer of a nation’s financial condition and creditworthiness. A negative NIIP figure indicates that foreign nations own more of the domestic nation’s assets than the domestic nation does of foreign assets, thus making it a 澳洲幸运5官方开奖结果体彩网:debtor nation. Conversely, a positive NIIP figure indicates that the domestic nation's ownership of foreign assets is greater than the foreign nation's ownership of that domestic nation's assets, thus making it a 澳洲幸运5官方开奖结果体彩网:creditor nation.

Example of a Net International📖 Investment Position (NIIP)

U.S. NIIP data is published by the Bureau of Economic Analysis (BEA) and accessible to all.

The country's NIIP at the end of the third quarter of 2020 was –$13.95 trillion, a decrease from its prior reading of –$13.08 trillion at the end of the second quarter of 2020. This means that the difference in the value of foreign assets owned by the U.S. fell further below the value of U.S. assets owned by foreign nations.

Here’s how the numbers stacked up:

• Foreign assets owned by the U.S. at end-Q3 2020 = $29.41 trillion
• U.S. assets owned by foreign nations at end-Q3 2020 = $43.36 trillion
• NIIP = –$13.95 trillion