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PCBS | PCBS&PMA: The Preliminary Results of the Palestinian Balance of Payments , First Quarter, 2021

Palestinian Central Bureau of Statistics (PCBS) and the Palestine

Monetary Authority (PMA(

 

The Deficit in Current Account is USD 428 Million of the Palestinian Balance of Payments – First Quarter 2021  

 

The Palestinian Central Bureau of Statistics (PCBS) and the Palestine Monetary Authority (PMA) announced the preliminary results of the Palestinian Balance of Payments (BoP) for the first quarter of 2021 under the joint issuance cycle. It should be noted that the data excludes those parts of Jerusalem which were annexed by Israeli occupation in 1967.

 

The deficit in trade balance of goods is the main reason for the current account deficit

An incessant deficit in the Current Account (goods, services, income, current transfers) which totaled USD 428 million.  This deficit in current account mainly triggered by the deficit of the Trade Balance of Goods, which reached USD 1,363 million, as well as the deficit in Services Balance, which amounted to USD 237 million.

 

The compensations of employees working in Israel are the main reason for the income account surplus

The surplus in Income Account (compensations of employees and investments income) amounted to USD 750 million.  This surplus was due to compensations of the employees working in Israel, which reached USD 707 million. As for the received investments income, it amounted to USD 83 million; and was mainly caused by the income received on the portfolio investments abroad, in addition to the interest received on the Palestinian deposits in banks abroad.

 

The current transfers from abroad to other (non-government) sectors are the main reason for the current transfers surplus

The Current Transfers achieved a surplus value amounted to USD 422 million with a decrease of 10% compared to the previous quarter. The total transfers from abroad amounted to USD 503 million, of which 10% were the transfers to the government sector, while the percentage of the transfers to other sectors reached 90%.  The donors’ current transfers constituted 7% of total transfers from abroad.

 

The preliminary results showed a surplus value for the Capital and Financial Account amounted to USD 444 million, the surplus in the Capital and Financial Account was mainly caused by the surplus in Financial Account which amounted to USD 369 million. There was an increase in the reserve assets at PMA amounted to USD 35 million, compared to an increase of USD 71 million in the previous quarter.

 

It is worth mentioning that the Balance of Payments (BoP) is used to determine the economic position of a country compared to other countries worldwide, and to calculate the size of its external debt. This data enables researchers and decision makers to devise informed economic policies and development plans to improve their external balance to guarantee the stability of the state and sustain the economic growth. BoP data was prepared according to the latest international recommendations taking into account the specificity of the Palestinian situation.

 

Table 1: Balance of Payments In Palestine* for the fourth quarter 2020

And first quarter 2021

 

(Value in million USD)

 

 

Indicator

Q4- 2020

Q1- 2021

Current account (net)

-293

-428

Goods (net)

-1,276

-1,363

Exports (fob)

541

464

Imports (fob)

1,817

1,827

Services (net)

-228

-237

Exports

220

242

Imports

448

479

Income (net)

741

750

Receipts

775

803

Compensation of employees

717

720

Of which from Israel

704

707

Investment income

58

83

Payments

34

53

Current transfers (net)

470

422

Inflows

556

503

To the government sector

95

50

of which from Donors transfers

54

9

To the other sectors

461

453

of which from Donors transfers

25

25

Outflows

86

81

Capital and financial account (net)

382

444

Capital account (net)

117

74

Capital transfers (net)

117

74

Inflows

117

74

To the government sector

41

11

of which from Donors transfers

41

11

To the other sectors

76

64

Outflows

0

0

Acquisition / disposal of non-Produced, non-financial assets non-financial assets (net)

0

0

 

 

Table 1 (Cont.): Balance of Payments In Palestine* for the fourth quarter 2020

And first quarter 2021

 

(Value in million USD)


 

Indicator

Q4- 2020

Q1- 2021

Financial account (net)**

265

369

Foreign Direct investment (net)

-59

43

Change in investment abroad (net)

-1

-1

Change in investment in Palestine (net)

-58

44

Foreign  Portfolio investment (net)

70

-39

Change in Assets (net)

28

-21

Change in Liabilities (net)

42

-18

Foreign Other investment (net)

325

400

Change in Assets (net)

288

423

Of which Currency and deposits***

-483

421

Change in Liabilities (net)

37

-23

Of which Loans nonresidents

22

-10

Of which Currency and deposits****

15

-14

Net errors and omissions

-91

-16

Overall balance

71

35

Financing

-71

-35

Exceptional financing

0

0

Change in Reserve assets (- = Increase/+= decrease)

-71

-35

 

 

*The data excludes those part of Jerusalem which were annexed by Israeli occupation in 1967.

** Include reserve assets.

***Currency and deposits: Including the cash of foreign currency in the banks and the deposits

of the Palestinian institutions deposited abroad.

****Currency and deposits: Includes the deposits of non-residents deposited in Local banks.

 

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