Chapter

Recent Trends in Global Balance of Payments and IIP Data

Author(s):
Carlos Sanchez-Munoz, Paul Austin, Alicia Hierro, and Tamara Razin
Published Date:
February 2020
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4. The number of economies submitting ESS to the IMF continued increasing in 2019. Annual balance of payments and IIP statistics for the period 2012–18 are published in the 2019 Balance of Payments Statistics Yearbook (BOPSY 2019) electronic release. For the BOPSY 2019, 196 economies2 submitted balance of payments data and 168 also submitted IIP data (of which 117 reported quarterly IIP, compared to 115 in 2018). The balance of payments data reported by 172 of these countries followed the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6),3 as compared to 169 in 2018. Data for countries that reported following the BPM5 version were converted by the IMF Statistics Department (STA) using standardized conversion formulas.

5. According to data published in BOPSY 2019, current account asymmetries decreased in 2018. The global current account balance (reflecting the difference between current account receipts and payments) was consistently positive in 2012–18 4 (see BOPSY 2019 World and Country Tables, Table A-1). The balance decreased by 16.9 percent to $352.0 billion in 2018, compared to $423.7 billion in 2017, or from 0.5 to 0.4 percent of global GDP. The changes coincided with a significant decrease in current account balances. In 2018 (as in every year since 2012), the overall current account balance resulted from the positive balance on trade in goods and services (excess of exports over imports), while the balances on primary and secondary incomes were negative. The global current account balance represents 0.5 percent of the total gross current account transactions (credits plus debits) in 2018 compared to 0.6 percent in 2017 (see Figures 1 and 3).

Figure 1.Global Balances on Current Account

(In billions of U.S. dollars)

Figure 2.Global Assets and Liabilities

(In billions of U.S. dollars)

6. Financial account asymmetries also decreased in 2018. The global financial account balance5 decreased by 31 percent to a positive $147.6 billion in 2018 from a positive $214.8 billion in 2017, or to 0.2 (from 0.3) in percentage of global GDP (see BOPSY 2019, Table A-1). This overall positive balance indicates more financial outflows than inflows at the global level, that is the net acquisition of financial assets is overestimated and/or the net incurrence of liabilities is understated (see Figures 2 and 4). One of the causes of financial account imbalances remains the undercoverage of offshore centers. In 2018, the balances on direct and portfolio investment registered opposite trends—switching from positive to negative for the former and from negative to positive for the latter. The sign of balances on financial derivatives, other investment, and reserve assets followed the 2017 trend: negative for other investment and positive for the other two components.

Figure 3.Global Balances on Current Account

(Percentage of GDP)

Figure 4.Global Assets and Liabilities

(Percentage of GDP)

7. Asymmetries between IIP assets and liabilities significantly increased in 2018. World IIP assets decreased by 3.6 percent from $161.7 trillion at end-2017 to $155.9 trillion at end-2018, and IIP liabilities by 3.1 percent from $161.9 to $156.8 trillion, respectively (see BOPSY 2019, Table E-2), with a net (negative) balance (liabilities higher than assets) that increased five-fold from $-182.5 to $-904.3 billion (from -0.2 to -1.1 in percentage of global GDP), respectively (see BOPSY 2019, Table E-1).6 At the global level, the overall negative balance indicates incomplete coverage (e.g., undercoverage of offshore centers), asymmetries in the time of recording, and/or asymmetric valuations.

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