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Public finance statistics: net financial assets
O public administrations financial account coverage transactions in financial assets and liabilities as well as the stock of financial assets and liabilities. The difference between the stock of financial assets and the stock of liabilities is called net financial worth.
At the end of the fourth quarter of 2023, the EU’s net financial assets were -€8.623 billion or -50.8% of the gross domestic product (GDP). Compared to the end of the third quarter of 2023, the EU’s net financial assets decreased by €626 billion. Compared to the end of the fourth quarter of 2022, the EU’s net financial assets decreased by €888 billion.
This information comes from quarterly public finance data published today by Eurostat. This article presents some findings from more detailed studies Statistics Explained Article.
Source dataset: gov_10q_ggfa
Net financial wealth can change due to transactions or due to other economic flows (mainly price changes, also known as holding gains or losses). Main Financial instrument The liabilities on EU government balance sheets are debt securities. As these instruments are traded on financial markets, their value changes over time and can be volatile.
In recent quarters, at EU level, the market value of the existing stock of debt securities has tended to decrease, particularly due to increases in interest rates and the consequent loss of value of fixed rate bonds. However, at the end of the fourth quarter of 2023, the market value of EU government debt securities liabilities increased again, mainly due to revaluations (+€584 billion), contributing negatively to net financial wealth. The continuation of the EU general government deficit (net financial transactions, measured as transactions in financial assets minus transactions in liabilities, -€167 billion) also contributed negatively to the evolution of net financial assets. On the other hand, positive revaluations of capital assets held by EU governments (+146 billion euros) partially offset this situation in terms of the impact on the change in net financial assets.