INTERNATIONAL INVESTMENT POSITION

Since accounts are fully consolidated, the financial assets and liabilities of domestic sectors cancel each other and the international investment position refers to the external claims and external liabilities of a country as a whole. The investment position differs from the traditional balance sheet in not considering the real assets and equity of Estonian residents. Therefore the investment position is not balanced.

Net investment position is the difference between the external assets and external liabilities of all institutional sectors of a country.

The net investment position is positive when external assets exceed external liabilities, reflecting the net debt of the rest of the world to the country. The negative investment position reflects the debt of the country to the rest of the world.

The same concepts and definitions as in balance of payments are used in compiling international investment position. The basic principles are accounting on an accrual basis and valuation in market prices of the day of compiling the position.

A methodological base for the compilation of the international investment position is the IMF Balance of Payments Manual 5^th Edition.