Trend Cross-border positions widen and face political limits

Summary

MGI treats cross-border positions as the final component of balance sheet health, warning that imbalances building in one direction for a long time may signal risk. In national accounts, net financial flows abroad equal domestic saving minus domestic investment, so economies that save more than they invest become net lenders and those that invest more become net borrowers. Actual international positions also reflect differences in how assets are valued across countries. These positions have grown substantially since 2010 and mostly widened in 2025, with Japan and Germany near 90 percent of GDP as net lenders and the United States near 90 percent as a net borrower. The report expects such imbalances to face growing scrutiny, including from the IMF and the G7, and says net lending and borrowing as a source of wealth may hit political limits, as happened in the eurozone debt crisis.