Board of Governors of the Federal Reserve System

Figure 1. Current Account Balances and International Investment Positions, 2025

This is a two-panel bar chart displaying data for OECD countries as a percent of GDP.

Panel A shows current account balances. The x-axis lists countries from left to right: Greece, United States, Iceland, Slovak Republic, New Zealand, Latvia, United Kingdom, Australia, Belgium, Canada, Poland, France, Estonia, Czechia, Lithuania, Italy, Portugal, Finland, Hungary, Austria, Spain, Slovenia, Germany, Japan, Luxembourg, Switzerland, Sweden, Netherlands, Ireland, Denmark, and Norway. The y-axis ranges from -5 to 15 percent of GDP. The bars show negative values (deficit positions) for countries on the left side of the chart, with Greece showing approximately -2 percent and the United States approximately -3 percent. The bars transition to positive values (surplus positions) in the middle and right portions, with Norway showing the highest surplus at approximately 13 percent of GDP.

Panel B shows net international investment positions. The x-axis lists the same countries but in a different order: Greece, United States, Slovak Republic, Ireland, Portugal, Spain, New Zealand, Hungary, France, Poland, Australia, Latvia, Czechia, United Kingdom, Estonia, Lithuania, Slovenia, Italy, Finland, Luxembourg, Austria, Iceland, Netherlands, Canada, Belgium, Sweden, Germany, Japan, Denmark, Switzerland, and Norway. The y-axis ranges from -200 to 400 percent of GDP. The bars show large negative values for countries on the left, with Greece at approximately -125 percent and Ireland at approximately -190 percent. The bars transition to positive values in the right portion, with Norway showing the highest positive position at approximately 350 percent of GDP.

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Figure 2. Current and Financial Accounts

This is a line chart showing annual data from 1960 to 2025. The y-axis measures percent of GDP, ranging from -5 to 5 percent. The chart displays two variables: "Current account balance" and "Financial account balance." Both series fluctuate around zero throughout the period. The current account balance shows notable variation, with periods of surplus (positive values) in the 1960s and early 1970s, followed by increasing deficits (negative values) from the mid-1970s onward. The current account balance reaches its lowest point around 2006, declining to approximately -6 percent of GDP, before recovering somewhat and fluctuating between -2 and -3 percent of GDP in recent years. The financial account balance generally mirrors the current account balance but with opposite signs, as would be expected from balance of payments accounting. The financial account shows positive values (surpluses) for much of the period from the mid-1980s through the mid-2000s, reaching peaks around 2006. Both series show convergence toward zero or slight positive territory by 2025.

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Figure 3. Financing the Current Account: Capital Inflows and Outflows

This figure contains two line charts showing data from 1960 to 2025.

Panel A. Current account financing. This is a line chart showing annual data. The y-axis measures percent of GDP, ranging from -20 to 20. The chart displays three variables: Current account balance, Gross inflows, and Gross outflows. The current account balance fluctuates around zero throughout most of the period, generally staying between -5 and 5 percent of GDP. Gross inflows show relatively stable values between 0 and 5 percent of GDP from 1960 through the early 2000s, then increase dramatically, reaching peaks of approximately 15-18 percent of GDP in the mid-2000s and late 2010s. Gross outflows follow a similar pattern, remaining between 0 and 5 percent of GDP through the early 2000s, then rising sharply to peaks of approximately 15-18 percent of GDP during the mid-2000s and late 2010s. Both gross flows show considerable volatility after 2000. By 2025, both gross inflows and gross outflows appear to be at approximately 10-12 percent of GDP.

Panel B. Gross capital flows and the current account. This is a line chart showing annual data. The y-axis measures percent of GDP, ranging from -5 to 15. The chart displays three variables: Current account balance, Gross inflows, and Gross outflows (flipped sign). The current account balance fluctuates near zero from 1960 through the late 1990s, then shows more variation, ranging between approximately -6 and 2 percent of GDP. Gross inflows remain relatively stable between 0 and 5 percent of GDP through the early 2000s, then increase substantially, reaching peaks of approximately 12-13 percent of GDP in the mid-2000s and early 2020s. Gross outflows (with flipped sign) follow a similar trajectory, staying between 0 and 5 percent of GDP until the early 2000s, then rising to peaks of approximately 12-14 percent of GDP. By 2025, gross inflows appear to be at approximately 10 percent of GDP, while gross outflows (with flipped sign) are at approximately 9 percent of GDP.

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Figure 4. Composition of U.S. Financial Flows

This figure contains two stacked area charts (Panel A and Panel B) showing data from 1960 to 2025. Both panels share the same y-axis scale measuring percent of GDP, ranging from -5 to 15 percent.

Panel A: Foreign Flows into U.S. Assets This is a stacked area chart displaying data from 1960 through 2025. The y-axis measures percent of GDP, ranging from -5 to 15 percent. Three categories are shown: FDI, Portfolio, and Other. The chart shows varying levels of foreign investment flows into U.S. assets over the period. In the early decades (1960s-1970s), total flows remained relatively modest, generally below 5 percent of GDP. Flows increased substantially beginning in the 1980s and 1990s, with notable peaks occurring around 2000 (reaching approximately 12-13 percent of GDP) and again around 2007-2008 (reaching approximately 12-14 percent of GDP). Following 2008, flows declined significantly and have remained more moderate, generally ranging between 2 and 8 percent of GDP through the mid-2020s. By 2025, the total appears to be approximately 3-5 percent of GDP.

Panel B: U.S. Flows into Foreign Assets This is a stacked area chart displaying data from 1960 through 2025. The y-axis measures percent of GDP, ranging from -5 to 15 percent. Three categories are shown: FDI, Portfolio, and Other. The chart shows U.S. investment flows into foreign assets over the period. Similar to Panel A, flows in the 1960s-1970s were relatively modest. Beginning in the 1980s, U.S. outflows increased substantially, with major peaks around 2000 (reaching approximately 13-15 percent of GDP) and 2007-2008 (reaching approximately 12-14 percent of GDP). After 2008, outflows decreased and have shown more moderate levels, generally ranging between 2 and 8 percent of GDP through the mid-2020s. By 2025, the total appears to be approximately 4-6 percent of GDP.

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Figure 5. Financing the Current Account: Official vs. Private Capital

This is a bar chart showing annual data from 1960 to 2025. The y-axis measures percent of GDP, ranging from -10 to 10 percent. The chart displays three variables represented by bars: "Current account balance," "Net official inflows," and "Net private inflows."

From 1960 through the late 1990s, the bars remain relatively modest in magnitude, generally staying within a range of -4 to 4 percent of GDP. Beginning in 2000, there is increased variation in the bars' heights. The current account balance shows notably negative bars (deficits) in the mid-2000s, reaching approximately -6 percent of GDP around 2006. Net official inflows show a significant positive spike around 2009, reaching approximately 8 percent of GDP.

From 2008 onward, net private inflows display substantial volatility with large swings, including a sharp negative bar of approximately -8 percent around 2008 and another negative bar around 2020. The current account balance shows a dramatic positive spike to approximately 4 percent in 2021. By 2025, the current account balance appears near zero, net official inflows are near zero, and net private inflows show a slightly negative value of approximately -1 percent of GDP.

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Figure 6. Decomposing the Deterioration of the NIIP

This is a stacked area chart showing annual data from 1980 to 2025. The y-axis measures percent of GDP, ranging from -100 to 25 percent. The chart displays five variables representing components of the U.S. Net International Investment Position: DI (net) for Direct Investment, Portfolio debt (net), Portfolio equity (net), Other (net), and the overall NIIP (Net International Investment Position).

The NIIP line shows the overall net position, which began near zero percent of GDP in 1980 and generally declined into negative territory over the period. By the early 2000s, the NIIP had fallen to approximately -20 percent of GDP. The position continued to deteriorate, reaching its most negative levels around 2005-2008 at approximately -25 to -30 percent of GDP. Following a brief improvement during 2008-2015, the NIIP resumed its decline, reaching approximately -75 percent of GDP by 2025. The stacked areas show how the different investment categories contribute to the overall position, with portfolio debt, portfolio equity, direct investment, and other categories making up the components. The net position in 2025 stands at approximately -75 percent of GDP.

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Figure 7. Cumulative Flows and the NIIP

This is a line chart showing annual data from 1980 to 2025. The y-axis measures percent of GDP, ranging from -100 to 25. Two variables are plotted: "Cumulated CA balances since 1960" and "NIIP" (Net International Investment Position). Both series begin around 1980 at approximately 10-15 percent of GDP. The Cumulated CA balances series shows a general declining trend throughout the period, falling steadily from about 10 percent in 1980 to approximately -75 percent by 2025. The NIIP series follows a similar downward trajectory but exhibits more volatility, particularly after 2000. The NIIP reaches its lowest point around 2008-2009 at approximately -25 percent of GDP, then shows some recovery before declining again. By 2025, the NIIP is at approximately -85 percent of GDP. The two series track relatively closely throughout most of the period, with the gap between them widening and narrowing at various points. Both series show substantial negative values in recent years, indicating a significant shift from the positive values seen at the beginning of the period.

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Figure 8. Foreign Holdings of U.S. Assets by Region

This is a four-panel stacked area chart showing annual data from 1985 to 2025. Each panel displays the share of holdings across six geographic regions: Rest of World (ROW), Japan, Europe, Canada, China + Hong Kong, and Middle East oil exporters. The y-axis for all panels measures share of holdings, ranging from 0 to 1 (representing 0 to 100 percent). Each panel represents a different category of foreign holdings of U.S. financial assets.

Panel A. Total. This panel shows the combined geographic distribution of all foreign holdings of U.S. financial assets. Europe represents the largest share throughout most of the period, starting at about 0.5 in 1985 and declining to about 0.3 by 2025. Japan's share peaked around 1990 at approximately 0.35 and declined to about 0.15 by 2025. China + Hong Kong's share increased from near zero in 1985 to about 0.15 by 2010, then declined slightly to about 0.10 by 2025. ROW increased gradually from about 0.15 in 1985 to about 0.25 by 2025. Canada and Middle East oil exporters maintained smaller, relatively stable shares throughout the period, each at approximately 0.05 to 0.10 by 2025.

Panel B. Foreign direct investment. This panel displays the geographic distribution of foreign direct investment in the United States. Europe holds the dominant share throughout the entire period, starting at about 0.70 in 1985 and declining to approximately 0.55 by 2025. Japan's share increased from about 0.05 in 1985 to a peak of about 0.25 around 1990, then declined to about 0.15 by 2025. Canada maintained a relatively stable share of about 0.10 to 0.15 throughout the period. China + Hong Kong's share remained minimal, increasing slightly to about 0.02 by 2025. ROW and Middle East oil exporters maintained small shares, with ROW at approximately 0.10 by 2025.

Panel C. Equities and corporate bonds. This panel shows the geographic distribution of foreign holdings of U.S. equities and corporate bonds. Europe's share remained relatively stable around 0.40 to 0.50 throughout the period, ending at approximately 0.40 by 2025. Japan's share peaked around 1990 at about 0.35 and declined to about 0.10 by 2025. ROW increased significantly from about 0.10 in 1985 to about 0.30 by 2025. China + Hong Kong's share increased from near zero in 1985 to about 0.05 by 2010, then declined to about 0.02 by 2025. Canada maintained a relatively small, stable share of about 0.05 to 0.10 throughout the period. Middle East oil exporters' share peaked around 2010 at about 0.10 and declined to about 0.05 by 2025.

Panel D. Treasuries and agencies. This panel displays the geographic distribution of foreign holdings of U.S. Treasury securities and agency bonds. China + Hong Kong showed dramatic growth from near zero in 1985 to about 0.30 by 2010, then declined to approximately 0.20 by 2025. Japan's share increased from about 0.20 in 1985 to a peak of about 0.35 around 2005, then declined to about 0.20 by 2025. Europe's share remained relatively stable around 0.15 to 0.20 throughout most of the period, ending at approximately 0.15 by 2025. ROW increased from about 0.10 in 1985 to about 0.25 by 2025. Middle East oil exporters' share peaked around 2010 at about 0.10 and declined to about 0.05 by 2025. Canada maintained a small, stable share of about 0.05 throughout the period.

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Figure 9. Bilateral Current and Financial Accounts

This is a scatter plot figure with two panels showing the relationship between current account balance and financial account balance for different country groups.

Panel A. In dollars. This scatter plot shows bilateral data with the x-axis displaying current account balance in billion USD, ranging from -400 to 200, and the y-axis displaying financial account balance in billion USD, ranging from -400 to 400. Five categories are plotted with different colored markers: China, Germany, Japan, Investment hubs, and Other countries. The data points are widely distributed across the chart. China's data points (appearing in one color) show a concentration of observations with current account balances between approximately 0 and 200 billion USD, with financial account balances ranging from about -400 to 200 billion USD. Germany's points cluster primarily in the positive current account range (approximately 50 to 200 billion USD) with financial account balances between approximately -200 and 100 billion USD. Japan's observations are concentrated near 0 to 100 billion USD on the current account axis with financial account balances ranging from about -200 to 200 billion USD. Investment hubs show scattered points across various positions, while Other countries data points are distributed throughout the chart space.

Panel B. Relative to partner GDP. This scatter plot displays bilateral data with the x-axis showing current account balance in percent of partner country GDP, ranging from -20 to 30, and the y-axis showing financial account balance in partner country GDP, ranging from -300 to 200. The same five country categories are plotted: China, Germany, Japan, Investment hubs, and Other countries. The data points show a different distribution pattern compared to Panel A due to the GDP-relative scaling. Most observations are concentrated in a tighter cluster near the origin, with current account balances primarily between -10 and 20 billion USD. Financial account balances are distributed more widely, ranging from approximately -250 to 150 billion USD. Investment hubs show some outlier points with larger negative financial account balances, while China, Germany, Japan, and Other countries show more moderate ranges in both dimensions.

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