Balance of payments and international investment position

The Balance of Payments and International Investment Position (BoP/IIP) are macroeconomic statistics that summarise the economic relations between the residents of an economy and the residents of the rest of the world. They are compiled in accordance with the guidelines of the IMF’s Balance of Payments and International Investment Position Manual (BPM), whose concepts and definitions are fully consistent with those set out in the System of National Accounts (SNA) and, in its European version, the European System of Accounts (ESA). In this context, the BoP/IIP is methodologically integrated into the framework of the National Accounts, and the data are consistent with those reflecting the relationships between resident sectors and the rest of the world, as recorded both in the non-financial accounts compiled by the National Statistics Institute (INE) within the National Accounts and in the financial accounts compiled by the Banco de España. Nevertheless, for practical reasons, small numerical differences may arise between the different datasets.

The Balance of Payments (BoP) records, for each reference period, the transactions that take place between residents and non-residents. It comprises: a) the current account, b) the capital account, and c) the financial account.

The current account includes the items of goods, services, primary income and secondary income. The financial account distinguishes the functional categories of direct investment, portfolio investment, financial derivatives, reserve assets and other investment. The detailed breakdown of the financial account and investment income also provides information by resident institutional sector and by type of financial instrument.

The International Investment Position (IIP) shows, at end-period, the value of stocks of external financial assets and liabilities and shows the same categories and classifications as the financial account of the Balance of Payments (BoP).

The BoP/IIP is compiled on a quarterly basis on an integrated basis. Changes in the IIP between two periods are equal to the sum of financial account transactions recorded in the BoP, plus other flows resulting from revaluations (arising from exchange rate or price changes affecting external assets and liabilities) or from other changes in volume (for example, those derived from changes in residence).

Monthly BoP data involve a higher degree of estimation than quarterly data and are disseminated with a lower level of detail, as not all information sources are available at this frequency. In the monthly BoP, goods and services are presented in aggregate form, and primary and secondary income are also aggregated. Quarterly data include information on goods broken down by product type and on services by type of service, as well as some information on selected BoP and IIP items by counterpart country or area and by currency. Annual data provide a more detailed breakdown than quarterly data. In particular, annual data disseminate more detailed information on the financial account by counterpart sector and by geographical breakdown. In addition, for direct investment, an alternative classification is provided following the so called directional principle, by economic activity sector and ultimate investing economy.

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Categories: External statistics