September 2003

Indicators 7.6 and 7.7 Spanish international investment position

The release of new quarters has been brought forward one month. As a result, these indicators are now released with a lag of three months.

Indicator 7.9 External debt

The Banco de España is publishing for the first time the statistic on Spanish external debt, thereby complying with the principles laid down by the International Monetary Fund (IMF) in its Special Data Dissemination Standards (SDDS). The data for this statistic will be disseminated in economic indicator 7.9 on a quarterly basis and with a lag of three months, in step with the release of the international investment position. The time series commences in December 2002.

A country´s external debt, as defined in the IMF "External debt statistics guide", is the outstanding amount of those actual current and not contingent liabilities vis-à-vis non-residents that are to give rise to payments relating to repayment of principal, interest or both. It therefore includes all financial instruments, except for shares and other equity, and financial derivatives, as these two types of instrument do not necessarily entail payments. The definitions and criteria used regarding time of recording, concept of residence and exchange rate conversion, along with classification by sector and instrument, conform virtually in their entirety to the principles set out in the IMF Balance of Payments Manual. Accordingly, external debt practically coincides with the liabilities of the international investment position, excluding -as indicated- shares and other equity, and financial derivatives.

External debt is presented broken down by institutional sector (general government, monetary authority, other monetary financial institutions and other resident sectors), by maturity of the financial instruments at the time of issue (more or less than one year) and by type of instrument (fixed-income securities, loans, deposits, trade credits and other liabilities). Loans extended by non-resident companies to resident companies in the same group are detailed separately under the direct investment heading. This heading does not coincide with what is in column 4 of indicator 7.7 (foreign direct investment in Spain, intercompany debt transactions). The differences are due to the fact that, according to the IMF Balance of Payments Manual, loans between parent companies and their subsidiaries should be included in the international investment position following the directional principle. Thus, if the parent of the group is a resident company, loans are included under Spanish direct investment abroad (as an investment if they are extended and as reducing investment if they are received), and if the parent of the group is a non-resident company, they are correspondingly included under foreign direct investment in Spain. Naturally, loans extended by non-resident group companies to resident companies appear in external debt under the direct investment heading, irrespective of whether the parent is a resident or non-resident company.