International Investment Position & External Debt –2016
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 2016.
The primary results of the IIP (external assets – foreign liabilities) for Palestine at the end of 2016 revealed that the net IIP amounted to about USD 1,173 million, which means that the Palestinian economy’s investments outside Palestine outweighs investments in Palestine from abroad. The resident cash deposits in foreign banks and foreign exchange in the Palestinian economy accounted for the bulk of the external assets, constituting 63.9% of the total value of external assets.
The total stocks of External Assets for Palestine amounted to USD 6,101 million, the Foreign Direct Investment abroad contributed to 6.6%, Portfolio Investments abroad reached 18.2%, while Other Foreign Investments abroad (mainly currency and deposits) reached 70.1% and Reserve Assets amounted to 5.1%. At sector level, the external investments of banks sector represented a large share of the external assets, standing at 74.6% of the total value of external assets.
The total stocks of Foreign Liabilities in Palestine (Stocks of non-residents invested in Palestine) amounted to USD 4,928 million, the Foreign Direct Investment in Palestine contributed to 54%, Portfolio Investments in Palestine reached 13.4% and Other Investments in Palestine (mainly loans and deposits from abroad) amounted to 32.6%. According to sectoral level, the foreign investments in banks sector contributed a major value in the foreign liabilities, represented by 34% of the total value of foreign liabilities on Palestinian economy.
The Gross External Debt on different sectors of the Palestinian economy reached USD 1,615 million, The debt on government sector represented 64.7%, while debt on banks sector reached 30.7%, and debt on other sectors (Nonbank financial corporations, non-financial corporations, NGOs and household sectors) amounted to 4.3%, and the lending between affiliated companies reached 0.3%.
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 Monetary Authority 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 based on (External Debt Statistics Manual) issued by IMF in 2003, this manual is harmonized with 5th edition of Balance of Payments and International Investment Position Manual