Palestine’s net stock of international investment position down by 16% at end of Q1 2020

RAMALLAH, The primary results of the International Investment Position (external assets minus foreign liabilities) for Palestine at the end of the first quarter 2020 revealed that the net IIP amounted to $1,763 million, down by 16% compared with previous quarter, which means that the Palestinian economy’s investments outside Palestine outweighs investments in Palestine from abroad.

The Palestinian Central Bureau of Statistics (PCBS) and the Palestine Monetary Authority (PMA) said the noticeable decline in the net IIP is attributed to the COVID-19 (coronavirus) pandemic and the restrictions imposed since the outbreak of the disease in Palestine.

Meanwhile, the total Stocks of External Assets in the Palestinian economy amounted to $7,253 million, with Foreign Direct Investment Abroad contributing by 4%, Portfolio Investments abroad by 19%, other Foreign Investments Abroad (mainly currency and deposits) by 67%, and Reserve Assets by 10%. At sectoral level, the external investments of banks sector represented a large share of the external assets, standing at 66% of the total value of external assets for Palestinian economy.

The total stocks of Foreign Liabilities in Palestine (stocks of non-residents invested in Palestine) amounted to $5,490 million, the Foreign Direct Investment in Palestine contributed to 50%, Portfolio Investments in Palestine reached 13%, and Other Investments in Palestine (mainly loans and deposits from abroad) amounted to 37%. 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.

The Gross External Debt on the Palestinian economic sectors reached $2,051 million as it increased by 4% compared with previous quarter, the debt on government sector represented 62%, while debt on banks sector reached 35%, and debt on other sectors (nonbank financial corporations, non-financial corporations, NGOs and households’ sector) amounted to 2%, and the lending between affiliated companies reached less than 1%.

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 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 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.

Source: Palestinian News & Info Agency