The net international investment position (NIIP) provides an aggregated view of the net financial position (assets minus liabilities) of a country vis-à-vis the rest of the world. Large net debtor positions may raise serious concerns as they might be difficult to sustainably finance. After reaching almost -25 per cent of GDP in early 2014, Italy’s NIIP markedly improved to -7 per cent in 2017. This work provides an overview of the main developments in and outlook for Italy’s NIIP.
The improvement in Italy’s NIIP since 2014 was mainly due to the current account surpluses. In a baseline scenario the NIIP is expected to turn positive in 2020. Among potential risks, a sizeable appreciation of the euro would imply significant valuation losses on Italy’s external assets. In the medium term the NIIP is likely to remain some distance from the threshold (-35 per cent) in the Macroeconomic Imbalance Procedure.
