RAMALLAH, Thursday, March 17, 2022 (WAFA) – The net stock of the International Investment Position (IIP) amounted to USD $3.659 billion at the end of the fourth quarter of 2021, according to the Palestinian Central Bureau of Statistics (BCBS) and the Palestine Monetary Authority (PMA).
In a press release on the preliminary results of IIP and External Debt statistics for Palestine, PCBS and PMA said that the primary results of IIP (external assets – foreign liabilities) for Palestine at the end of the fourth quarter 2021 revealed that the net IIP amounted to USD 3,659 billion, increasing by 1% compared to the previous quarter. This means that the Palestinian economy’s investments outside Palestine outweighs investments in Palestine from abroad.
They added that 66% of the total external assets of the Palestinian economy are currency and deposits.
The total stocks of External Assets for Palestinian economy amounted to USD 9,628 billion, the Foreign Direct Investment Abroad contributed to 3%, Portfolio Investments abroad reached 16%, while Other Foreign Investments Abroad (mainly currency and deposits) reached 72% and Reserve Assets amounted to 9%. At sectoral level, the external investments of the banking sector represented a large share of the external assets (balances abroad, vault cash and portfolio investment) standing at 70% of the total value of external assets for Palestinian economy.
They pointed that 50% of the total foreign liabilities on the Palestinian economy are foreign direct investment.
The total stocks of Foreign Liabilities in Palestine (stocks of non-residents invested in Palestine) amounted to USD 5,969 billion, the Foreign Direct Investment in Palestine contributed to 50%, Portfolio Investments in Palestine reached 14%, and Other Investments in Palestine (mainly loans and deposits from abroad) amounted to 36%. At sectoral level, the foreign investments in banks sector contributed a major value in the foreign liabilities, represented by 36% of the total value of foreign liabilities on Palestinian economy.
They noted a decrease of stock of external government debt by 0.3%, reaching about USD 1.3 billion at the end of the fourth quarter 2021.
The Gross External Debt on the Palestinian economic sectors reached USD 2,159 billion, increasing by 1% compared with previous quarter. Debt on government sector represented 61%, while debt on the banking sector (deposits of non-residents in banks operating in Palestine) reached 36%, and debt on other sectors (non-bank financial corporations, non-financial corporations, NGOs and households sector) amounted to 2%, and the lending between affiliated companies reached 1%.
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, deposits of non-residents deposited in the banks operating in Palestine, the Palestinian bonds purchased by non-residents (where applicable), 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.
K.F.
