Statistical news focuses on the latest figures and trends in Danmarks Nationalbank’s statistics. Statistical news is targeted at people who want quick insight into current financial data.

Denmark's foreign assets

Denmark’s IIP fell kr. 136 billion in 2022

At the end of fourth quarter 2022, Denmark’s net international investment position, IIP, was kr. 1,792 billion. It has been a very turbulent year for the IIP due to the large price fluctuations on shares, bonds and exchange rates. Overall, the IIP fell kr. 136 billion in 2022 (corresponding to 7.1 per cent), despite a record surplus of kr. 367 billion on the balance of payments.



Drop in IIP in 2022 despite record surplus on balance of payments
The chart shows Denmark’s net international investment position.

 

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At the end of fourth quarter 2022, Denmark’s net international investment position, IIP, was kr. 1,792 billion. It has been a very turbulent year for the IIP due to the large price fluctuations on shares, bonds and exchange rates. Overall, the IIP fell kr. 136 billion in 2022 (corresponding to 7.1 per cent), despite a record surplus of kr. 367 billion on the balance of payments.

IIP is Danish residents’ total assets abroad minus foreign countries’ assets in Denmark, that is, Danish liabilities towards foreign countries. A large part of the Danes’ assets abroad is invested through pension funds, investment funds and Danish non-financial companies. Foreign assets in Denmark mainly consists of listed shares and bonds as well as foreign subsidiaries in Denmark.

Turbulent year for IIP

Financial markets had a turbulent year in 2022. The prices of shares and bonds fell towards October and then rose again in the last months of the year. At the same time, the dollar strengthened against the euro in the first nine months of the year, before weakening in the last three months.

The large price and exchange rate changes meant that the IIP fell kr. 331 billion in the last months of the year. This is mainly related to the fact that the prices of Danish shares rose far more than those of foreign shares. The value of Danish liabilities therefore increased significantly more than the value of the Danish assets abroad.

Price and exchange rate changes will typically level out in the long term, with the builtup of the IIP primarily driven by balance of payments surpluses. The surplus amounted to kr. 367 billion in 2022 and is a measure of Denmark’s current savings abroad. It is the largest surplus ever and is driven by surpluses on trade in goods and services and the net return on Denmark’s IIP.