Report: Net Stock of int’l Investment Position hit $1,659 mln in 2018 fourth quarter

PNN/ Ramallah/

The Palestinian Central Bureau of Statistics (PCBS) and the Palestine Monetary Authority (PMA) announced the preliminary results of the International Investment Position (IIP), and External Debt statistics for Palestine as of end of the fourth quarter 2018.

The primary results of the IIP (external assets – foreign liabilities) for Palestine at the end of the fourth quarter 2018 revealed that the net IIP amounted to USD 1,659 million, which means that the Palestinian economy’s investments outside Palestine outweighs investments in Palestine from abroad.

The resident deposits in foreign banks and foreign exchange in the Palestinian economy accounted for the bulk of the external assets, constituting 59% of the total value of external assets.

The total stocks of External Assets for Palestinian economy amounted to USD 6,597 million, the Foreign Direct Investment Abroad contributed to 5%, Portfolio Investments abroad reached 22%, while Other Foreign Investments Abroad (mainly currency and deposits) reached 65% and Reserve Assets amounted to 8%. At sectoral level, the external investments of banks sector represented a large share of the external assets, standing at 69% of the total value of external assets for Palestinian economy.

The Foreign Direct Investment in the Palestinian economy accounted for the bulk of the total value of foreign liabilities, constituting 55%.

The total stocks of Foreign Liabilities in Palestine (stocks of non-residents invested in Palestine) amounted to USD 4,938 million, the Foreign Direct Investment in Palestine contributed to 55%, Portfolio Investments in Palestine reached 15% and Other Investments in Palestine (mainly loans and deposits from abroad) amounted to 30%. At sectoral level, the foreign investments in banks sector contributed a major value in the foreign liabilities, represented by 35% of the total value of foreign liabilities on Palestinian economy.

Stock of  external government debt amounted to about USD 1 billion at the end of the fourth quarter 2018

The Gross External Debt on the Palestinian economic sectors reached USD 1,535 million, the debt on government sector represented 67%, while debt on banks sector reached 27%, and debt on other sectors (nonbank financial corporations, non-financial corporations, NGOs and households sector) amounted to 3%, and the lending between affiliated companies reached 3%.

The International Investment Position (IIP) is an accounting sheet that records the investments stocks for the residents in Palestine (individuals, institutions and government) invested in the rest of the world (abroad) under the name of (assets), and compares them to the investments stocks owned by residents outside Palestine (individuals, institutions and government) invested in Palestine under the name of (liabilities).

The Balance of Payments Manual – fifth edition, issued by the International Monetary Fund in 1993, divides the assets and liabilities into direct investment (investment by 10% and more in the non-resident capital), and portfolio investment (investment less than 10% in the non-resident capital as well as investment in bonds), and other investments. It divides these other investments into stocks of trade credit, loans, currency and deposits and any other assets or liabilities), in addition to the Reserve Assets, i.e. Stocks held by the Central Banks/ Monetary Authorities to address the imbalances in the balance of payments, it is worth mentioning that the reserve assets are only included in the asset side.

 

The External Debt is an accounting sheet that records the debt stocks on Palestinian economic sectors due to non-residents. These include (loans from non-residents, the deposits of the non-residents deposited in the banks sector in Palestine, the Palestinian bonds purchased by non-residents, debt transactions between the non-resident enterprises and fellow enterprises in Palestine. They encompass as well any other liabilities on Palestinian economy) the data of external debt have been extracted from the liabilities side in the international investment position matrix (debt items). Preparing, classifying and publishing of the data are based on (External Debt Statistics Manual) issued by IMF in 2003, this manual is harmonized with the fifth edition of Balance of Payments Manual.

Table 1: International Investment Position (IIP) Stock by Economic Sectors for Palestine, at the end of the Fourth Quarter, 2018

Value in million USD

TOTALOther SectorsBanks SectorGovernment SectorMonetary Authorities (PMA)            Economic Sector

 

 

 

 

 

Investments Stocks by

Type of Investment

House- Holds SectorNonbank Financial Corporations, Non-Financial Corporations, and NGOs Sector
1,659-962-1902,838-906879International Investment Position (net)*
6,597369754,581126879Total External Assets
34711336000Foreign Direct Investment Abroad
1,4510438942071Portfolio Investments Abroad
4,261252013,639126270Other Investments Abroad
3,88425373,5520270 Of which: currency and deposits**
5380000538Reserve Assets
4,9389981,1651,7431,0320Total Foreign Liabilities
2,7219987201,00300Foreign Direct Investment in Palestine
726040332300Foreign Portfolio Investments in Palestine
1,4910424171,0320Foreign Other Investments in Palestine:
1,06303101,0320     Of which: loans from abroad
4170041700    Of which: currency and deposits***

Notes:

– The data in the above table are close to the nearest integer.

– The data does not include the value of land owned by non-residents.

* International investment position (net): equals total external assets minus total foreign liabilities.

** Currency and deposits: Include the residents deposits in banks abroad, in addition to foreign exchange in Palestinian economy.

*** Currency and deposits: Include the deposits of non-residents deposited in resident banks.

Table 2: Gross External Debt Position on Palestine, at the End of the

Third and Fourth Quarters, 2018

Value in million USD

Stock at the end of the Fourth Quarter 2018Stock at the end of the   Third Quarter 2018Economic Sector
1,0321,037General Government
11792Short-term
915945Long-term
00Monetary Authorities
00Short-term
00Long-term
417481Banks
196204Short-term
221277Long-term
4242Other Sectors
44Short-term
3838Long-term
4444Direct Investment: lending between affiliated companies
4141Debt liabilities to affiliated enterprises
33Debt liabilities to direct investors
1,5351,604Gross External Debt Position