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

TOTAL Other Sectors Banks Sector Government Sector Monetary Authorities (PMA)             Economic Sector

 

 

 

 

 

Investments Stocks by

Type of Investment

House- Holds Sector Nonbank Financial Corporations, Non-Financial Corporations, and NGOs Sector
1,659 -962 -190 2,838 -906 879 International Investment Position (net)*
6,597 36 975 4,581 126 879 Total External Assets
347 11 336 0 0 0 Foreign Direct Investment Abroad
1,451 0 438 942 0 71 Portfolio Investments Abroad
4,261 25 201 3,639 126 270 Other Investments Abroad
3,884 25 37 3,552 0 270  Of which: currency and deposits**
538 0 0 0 0 538 Reserve Assets
4,938 998 1,165 1,743 1,032 0 Total Foreign Liabilities
2,721 998 720 1,003 0 0 Foreign Direct Investment in Palestine
726 0 403 323 0 0 Foreign Portfolio Investments in Palestine
1,491 0 42 417 1,032 0 Foreign Other Investments in Palestine:
1,063 0 31 0 1,032 0      Of which: loans from abroad
417 0 0 417 0 0     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 2018 Stock at the end of the   Third Quarter 2018 Economic Sector
1,032 1,037 General Government
117 92 Short-term
915 945 Long-term
0 0 Monetary Authorities
0 0 Short-term
0 0 Long-term
417 481 Banks
196 204 Short-term
221 277 Long-term
42 42 Other Sectors
4 4 Short-term
38 38 Long-term
44 44 Direct Investment: lending between affiliated companies
41 41 Debt liabilities to affiliated enterprises
3 3 Debt liabilities to direct investors
1,535 1,604 Gross External Debt Position